It can be done, yes, however would need a d-pad a similar size to the Intellivision one. It is hard with 8 to get tacts working, let alone 16 way, as the disc needs to press on one tact without activating the neighbour. That would mean in reality you'd need a d-pad about 2x the size of the one used in my project.
Yes, some games need 16 way, Skiing is one of them, however most of the games play fine, all be it 8 way. 4 way is fine for maze games of course, no issue, 8 way for games like Tron Deadly Discs, etc.
One thing though with the stock Intellivision controller, as we all know who have used one, is they are hit and miss the 16 way the d-pad works; even back in the days the console was brought to market; reason being the controller uses a piece of acetate to separate two layers of conductive printed traces, when pressed, makes the contact; not that accurate.