Yes, the problem with BIP 16 is obvious and I and others have discussed it enough. Read the BIP, or at least genjix's summary.
In my humble opinion, this kind of trash talk against BIP 16 is bad for Bitcoin.The poll in this thread says the community prefers BIP 16.
The chart on the bitcoin wiki says the core developers prefer BIP 16.
And the actions of the big mining pools and independent miners says that they overwhelmingly prefer BIP 16.
Luke, I'd be delighted to add Eligius to the list of pools that are supporting BIP 16 in my signature.