700mah from a 16340 is feasible, HKJ tested the ET ICR to
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HERE... course the 14500 version does 800
I'm also a big 0.9-4.2V, AA-14500 enthusiast - the availability, compatability diversity, and versatility of this battery platform is unmatched. It's fun being able tune flashlight performance based on grade of fuel.
Never liked the CR123 platform, primarily because it represents an island among all the AA/Eneloop gadgets I've consolidated around in interests of commonality. Same with 18650 lights since they invariably rely on CR123s as back-up. That said, I finally broke down and bought my first dedicated CR123/16340 light, an HDS 325. What a fabulous light, I'm glad it bought it, but due to its 3V min, it gets left at home when I'm really concerned about illumination, and I'm not sure I'll repeat purchase.
Flashlights are critical emergency tools for me and 0.9-4.2v support, with the right flashlight, means I can MacGyver ANY battery for illumination - from a 9V, AAA, or D cell, to a CR123, 18650 or 26650. I like Lego lights, and my favorite rig is a 0.9-4.2v, AA/14500 head running a KP 2500 16650 cell - I can easily make tinfoil spacers to run it on common AA/AAA/CR123s.
It saddens me that the top quality US manufacturers have such limited broad-voltage, or even 1.5V, support, but I suppose it's one of those features-vs-reliability compromises. However, in my experience, battery failure/depletion is far more likely (a certainty) than flashlight failure, so IMHO it's worth it. Sure you can lug more batteries, but so too more flashlights - I prefer to keep either to a minimum.