For the F-35A (Air Force) and F-35B (Navy carrier-ready), yes, losing a fight to the F-16 is a big problem.
For the F-35B (Marines), it's replacing the AV-8 Harrier, for which the term "losing a fight" too often meant that the plane got unstable and killed its pilot. The F-35B is a too-expensive but far-better alternative.
f-35c is the carrier ready variant. with heavier landing gear and corrosion resistance. B is vstol, the harrier replacement. B will have little fuel on board at take off to increase arms and refuel immediately. The mid fuselage fan will enable very slow flight, but that assumes a non threat environment. CAS missions will be handled by B with SDB’s (small diameter gps guided bombs). The F-35 in general but the B and C’s in particular will be the QB’s of flight packages controlling squad’s of x45 type platforms. The full report on the f-16 encounter makes it clear that its BS. The 35’s are partially combat ready, I personally think the chicomms may have gotten access to the code and we’re busy building it. Also since originally planned many of the electronic systems have been made obsolete, so replacing/updating the radar, computer, data link, ect is necessary. The radar can already be used to destroy electronics. As its power accuracy is increased it will become more lethal. Then their is the 10kw electronic laser advances made in the last few years. If what has been publicly released is near true, photonic “bullets” will be a real possibility by 2020.
Lastly from what I understand some of the $ were used to build a hypersonic manned platform that has been flying for about 18 months. The X-43 seems to be a red herring. The engine tech is not yet there, and there have been a few in flight incidents requiring quick landings.