I'm also of the opinion that the MR X1600 is not out of date. But even if it was, what could Apple do? The limited thermal budget prevents them from using high-end GPUs (at least they won't work on the 15.4" model), so they are really stuck with mid-range parts. The current choices are the MR X1600, the MR X1700, the Go 7600, and the Go 7700. We are using the 1 out of those 4 already, and the Go 7600 performs the same or lower than the MR X1600. (But that becomes kind of a ATi vs nVidia debate).
The MR X1700 is identical to the MR X1600 only that it is produced using a 90nm strained silicon process so in theory it uses a little less power and can be clocked a bit higher. In actuality, the MR X1600 can perform exactly the same as the MR X1700 at the same clock speeds, only it may consume a bit more power. Certainly the MR X1700 doesn't have enough to put the MR X1600 out of date. Seeing that the MR X1700 hasn't really replaced the MR X1600, I'm betting there are production or price concerns with the strained silicon process which makes the MR X1700 prohibitive. ATI's drivers also don't seem to have universal support for the MR X1700 yet.
That really only leaves the Go 7700 and yes I admit that the Go 7700 would be faster in basically all cases since it's a 12 pipeline design versus the MR X1600's 4 pipeline, 12 pixel shader layout. Still, as Zadillo mentions, the difference is hardly earth-shattering. The Go 7700 may have a lot of hardware, but those 12 pipelines don't perform at their full potential since they don't have sufficient memory bandwidth feeding them. So the difference between the Go 7700 and the MR X1600 is no where near the 7600GT's advantage over the desktop X1600XT. The Go 7700 does use the 80nm process, but that's a cost half node so it wasn't optimized for power savings. In any case, the Go 7700 does seem pretty power efficient considering the hardware involved, but it'd probably still use more than the MR X1600. I don't think the performance difference is enough to condemn Apple for not going with the Go 7700 in the C2D refresh, especially if ATI was offering Apple a good discount to continue using the MR X1600.
In terms of the lifespan of the MR X1600, it has been around for a while, but the only reason is that in comparison to the competition, it came out early. The MR X1600 was really launched in December 2005 and Apple was one of the first manufacturers to integrate it. The Go 7600 wasn't launched until a few months later, so that's why it seems newer.
The whole mobile graphics segment as been pretty stagnant the last year anyways since everyone's devoting resources to the DX10 transition. ATI in particular doesn't seem to be paying much attention since the MR X1700 was such a disappointment. However, there original schedule called for DX10 GPUs in Q4 2006, so they probably weren't planning to launch a mobile refresh anyways. But, with the constant delays they were forced to put something out, which became the MR X1700. ATI looks to be slipping even further since the R600 is now confirmed to be delayed until May. It's also not helping matters that ATI is trying to produce their mainstream parts on the brand new 65nm process. The new process will make for great parts, but it's a matter of how long we'll have to wait. nVidia is going the opposite direction and making their mainstream parts in the 80nm process. With the 80nm process being a cost half-node, nVidia's mainstream mobile processors could well be power hungry and run hot, especially if they try putting a 256-bit memory controller in it (like the desktop 8600 Ultra is supposed to have). The advantage though is that they should be able to launch a few months ahead of ATI, probably still not until early Q2 though.