1400 USD for 'competent' is a tough pill to swallow. I think the 17-40 is priced right.(699)You get what you pay for with that one but as for the 16-35, the one stop in light and not very much and according to others, no better in the corners for twice as much?
If you were to track the 16-35 f/2.8II price since launch, you'll see that it dropped a LOT. Historically, I'd regard $1400 as a great buy for this lens. Agreed, the 17-40 f/4 is seriously good value at $699, and it will match the IQ of the 16-35 f/2.8II once past f/5.6. If it's important for your shooting style to have the option of shooting commercial quality files at f/2.8, then the 16-35 f/2.8II will be your UWA zoom of choice.
Back on topic, I don't think the 16-35 lens needs IS. It's already bulky in the weight and size department and IS would necessitate a chunky price hike. Personally I shoot with the 17-40 f/4 as my UWA work generally needs f/8-f/11. Any update on the 16-35 should be directed at the difficult to solve IQ issues.
The lens that will
grab my attention is the 14-24 f/2.8, Canon's current daydream special.