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You seem pretty sure of that, but where is the evidence that the DS can pull it off? Every Wi-Fi feature is limited to its wireless counterpart in some way, and how many games even have 16-player wireless communication?And for sure, it doesn't require nearly as much of data transfer - which actually doesn't really have to do with the system's specs - as other multiplayer experiences on DS do.
The aforementioned feature, if we're talking about the same thing, could be given life through a wholy different system done on DS itself. One would have the option to either create a room with the desired rules - as in levels, single/double, allowed Pokemon, etc. - or join an already existing room. Now, I'm not sure if they would bother to do such a thing, but I can rest assured that it is totally possible.
Besides, 16 is thinking small. Think more along the lines of 64 or 128 people, like in the official tournaments. You're also missing the required need to organize such tournaments; they should neither be random nor Friend Code-based for obvious reasons. How would the DS handle that?