Well straight incarceration is not a very effective punishment but probation also does not seem to be enough does it? I like Alchemist's proposal, and you can also count on the wrongful death lawsuit to take the parents to the cleaner.
When I was 16 I had friends who drank and drive as a matter of course, mostly because they were teenagers and although consequences could be rationalized, they did not mean much from an experience perspective. None of my friends had discipline free parents either. Saying this child (that is what he is) is a menace to society for one, albeit terrible event, is not a fair assessment. Its not like the child is guilty of systematic or serial violence. It was literally a one-time thing, and likely will remain that.
The defense deferred the blame on the parents, I don't agree with that and think any 16 year old who is not mentally handicapped knows that there are consequences to their actions. He was consuming alcohol underage, under the influence behind the wheel, driving recklessly by being almost double the speed limit, and 4 counts of vehicular homicide. More than probation is called for here. Put him in jail for 20 with a parole option after 7 granted he attends therapy sessions while behind bars and continues for a few years while on probation following a parole. A person with such a warped sense of reality is just a danger to society until he can realize the consequences, if that really is the case.
I truly believe that are just deflecting the blame to the parents to protect him from prison, and as such will not learn responsibility of his actions since mom and dad's money is bailing him out.
A teenager should not require a full adult appreciation of consequences to espcape the label of mentally handicapped. It is not a rational position to hold. Neither is that this person is a menace to society. If there is no contrition, rehabilitation and then there is recidivism, then I would agree, but he should have a chance at redemption.
That being said, Duck, your proposal for sentencing does not seem beyond the pale, and completely blaming the parents should not be a complete defense unless of course, the parents were extraordinarily negligent.