Coinbase likely calculates the fees dynamically based on the current fees being included in recent blocks. This is to keep your transaction competitive so it makes it into a block. One of the worst feelings is when your transaction is sitting there for days unable to make it into a block because the site you sent from didn't use high enough fees.

Is the fee you're reference the fee you actually paid, like your 0.16BTC ended up only having 0.1583BTC? My guess is your looking at the total batch fee on the transaction your BTC was included in rather than what you personally paid. I haven't seen my bitcoind fees as low as 0.00017 in a long time, 0.0005 is more like it at the moment, but like you say 0.0017 does seem high, especially if it that was paid entirely by you.

Its possible recent blocks contained significantly higher fees that caused Coinbase to jump their tx fees as well. As we know with the 1MB block limit, transactions have been experiencing high competition to get included in a block. But my suspicion is you're looking at the total fee for the tx that Coinbase sent out (which would include other peoples addresses).

From Coinbase: https://support.coinbase.com/customer/en/portal/articles/815435-does-coinbase-pay-bitcoin-miner-fees-?b_id=13521

Yes, Coinbase pays the miner fees (typically 0.0003 BTC) on external transactions in order to ensure these transactions propagate throughout the bitcoin network quickly. For very small transaction amounts you may be prompted to pay the transaction / miner fee.

This claims you shouldn't have paid a fee at all. Is it possible you're just looking at the TX fee that Coinbase paid for your transaction?