So you get 16 MB total address space, the same as an original 68000, but instead of just loading/saving a 32-bit value for the memory address, you have a 16-bit offset and an 8-bit bank. The Apple IIGS and WDC C compilers use 32-bit pointers, but they have a notion of "memory model" similar to 16-bit x86.
The one big win of 65C816 is that 8086/88 overlaps its 16-bit segment and 16-bit offset so much a 32-bit long pointer only addresses 1 MB of RAM. The '816 bank+offset has no overlapping bits.