^ To answer that question, the Cadillac Sixteen's V16 was based on the same small-block design that dates back 51 years ago. The inclination was that it was basically two LS7s stitched together, and gave us a good idea of what engine sizes and outputs to expect in the Z06. That said, it wasn't as simple as that. The V16 was one of GM's first all-new engines to be designed completely within and tested within a computer before actually being built.
As for the Rolls-Royce design, there have been various stories floating about the engine, and none of them really point to a direct issue with the design, but more than RR decided that the size of the engine was unnecessary when they have a pretty decent V12 to tap into. As one can imagine, BMW probably wouldn't have wanted to design a brand-new engine for just one car, as there really wouldn't have been any benefits to their own models.
...Interestingly enough, we can sorta bring this one back to Cadillac. If we go back in time a bit, Cadillac had a V12 engine that they showed off in a few concept cars and a few one-off street models, but sadly never made it to production. And to be completely honest, nobody quite knows why. It was at one point looking like a certainty for the XLR, and they had a functional Escalade-V with the V12 sitting up-front. But GM had scrapped the plan, and had even reportedly sold it off to Toyota, but no one is even sure of what had come of that.
There have been rumors that the engine may show-up in the "ULS" that is so often refered to, but has yet to be seen, but no one really knows whats going on with any of that as of now.
...It does bring up an interesting question as to what exactly happens to so many engine designs that start and stop, and never really come to bear fruit. One that does come to mind is Ford's "Hurricanne" V8 program, which I think was spun-off into some special Ford Racing powerplant, but was origionally meant for the F150 and the Mustang...
One new engine development that I've been trying to follow is Cadillac's (I'm sensing a trend here...) "Ultra" V8 that is due to replace the Northstar. There has only been a few small mentions of it, no really solid details, only that they are "working on it."
...We'll see what happens...