If doing a lot more mileage forces you to slow down paces a lot, is it still the right way to go?

Yes it's still the right way to go. Eventually your training pace will drop back down naturally as you improve.

It may be beneficial to add more slow miles plus a tiny bit more fast stuff, progressively. But if the 16 minute 5k runner thinks he or she is only going to make slight improvements with big training increases, then perhaps they are limiting their vision of their true potential?

What is the real difference between two runners with very different PR's? In most cases it's mostly mental, the slower guy hasn't learned how run run fast. Maybe he will, maybe he won't. I once tried to coach a woman who felt embarassed by doing speed work, because she thought she looked silly, even though I tried to reassure her that I thought her turn of speed was impressive. Some runners are too shy to show off their real talent.

My $.02:

I think it doesn't matter too much how fast you go on your easy days. But you should keep track of your workouts. The workouts will slow down as your mileage increases, but eventually they will start to improve as you get used to the mileage, and will continue to improve as your mileage drops and you get into the swing of the season. That's the whole idea behind macrocycles and periodization.

The hard workouts should get faster, or longer. the easy runs can be at any pace that is comfortable. Increasing mileage should improve performance almost immediately. If it doesn't you are not doing it right.

How old are you and what do your coach think?

For what it's worth, wejo was doing slower than 7min miles (granted, at altitude) on his training runs when he was about to hit 28:06 for 10k.

http://www.letsrun.com/2006/collegesuck.php