I'm not positive about 16 hours of grazing. My horses most of the time prefer hay to the grass. When I let them go to the grass pasture in couple hours they are on gate waiting for me to take them back to the main field. And while there they start hay like they were not fed for the day. They also spend lots of time in shed.
However I do agree that 24/7 stabling is something unnatural and don't do a horse any good. 24/7 outside is much healthier and I stick with it personally. Although I did 24 hours stabling for couple days in row when we had ice all over (really, really bad and slippery), but it's an extreme condition.