Which 18-55mm are you referring to? Version 1 (D50), 2 (D40/x) or 3 (D60, VR)?
If you are referring to the D50 or D40 kit lens I beg to differ when you refer to sharpness and CA. the 18-55mm is sharp, real sharp. So sharp I bought it as a backup (of course, price factored in).
CA wise, I do not believe it lags behind the 16-85mm by much either.
Better optical quality - what do you mean by this? Sharpness or CA?
Btw, better coating i.e. SIC in your case, does not mean better quality, in all seriousness. So you cannot look at that factor at all. If you want to compare the 2, then you would have to compare on the points of coma and flare instead. Not the coating.
As for the rest of your points, I'd agree with you.
The 16-85 is just simply better than any of the 18-55 ever made. Never the less. if you find the 18-55 is enough for you, it is fine. It's a light weight small lens, but that is all where the 18-55 is better, it is definitely not an alternative to the 16-85.