I haven't heard of the 16-35 being superior to the 17-40 IQ-wise, but then I haven't had a 17-40 and haven't looked into it!
I went for the 16-35 because I did want the f/2.8.
Hey Tony, I purchased the 17-40L specifically for my car club so that I can shoot car shows outdoors. This was the reason why I purchased it. Now that I'm shooting more events and some wedding work I sometimes want faster glass so its easier to balance the ambient with flash or stretch it an shoot higher ISO's and use available light only.
I often read reviews mentioning the 16-35L mk2 has better IQ than the 17-40L. Man if thats the case I almost find it hard to believe. I absolutely love the IQ I get from the 17-40L. For me I'm looking for faster glass for more available light shooting. I use the flash exposure alot too so f/4 on my full frames do a great job in documenting an event.
If I need a wide angle prime I love my 24L for real low light situations. The thing is if I'm using flash exposure as the main light f/2.8 zooms do a killer job at f/2.8 shallow dof for events work. f/4 is not to shabby either but I'm always demanding and love a little more faster glass on hand.