My first instinct was to say yes, you are crazy, borderline psycho.
I believe that for a first car, you should get him something with 4 cylinders, and preferably something FWD. I think the 00 Si is a great choice, I had one myself a few years ago. This car will be efficient, reliable and more than enough fun. Because it is FWD it will be safer for a 16 year old that has a limited understanding of vehicle dynamics, but a virtually unlimited capacity for rash decisions (you may have a very good kid, but believe me, all 16 year olds, and particularly boys, are stupidity-prone).
HOWEVER, if he insists and you capitulate, I highly encourage you to send him to driving school. And not the $99 ones that put him in a Ford Focus for a day and teach him how to parallel park. Spend at least $1000 on a quality driving school, which will teach him the wonders and responsibilities of rear-wheel drive, and the value of traction control. Perhaps even go with him and make it father-son weekend thing. A nice investment in driving school won't just bring you closer together, it may very well save his (or someone else's) life.