It's got the best of everything available that year... 1985 = solid front axle, super clean 28-32mpg diesel, pluse a wildernest. It should definitely sell for a premium price.
$16.5K is much more than I would pay for it, I think you could get a Tacoma w/wildernest for a comparable price or less and have more power, smoother ride, factor locker, etc,
but I don't fault the owner for putting it out there with that as an asking price, he or she has a rare vehicle.