If all we were talking about was ship-to-ship combat, you'd be right. But since the great percentage of the world's population, trade, and resources are located within 22 miles of the coast (16" gun range) the Iowa's would still be extremely effective.
As to their expense to operate, the best overhaul would be replacing the old steam boilers with gas turbines. A nuclear powered ship would be even better. The crew savings would pay for the upgrade.
One more thing: Modern satellite-guided rounds would be a great compliment to the Iowa's 16" guns. Imagine lobing shells 100 miles inland with the precision of a JDAM but with fantastic kinetic energy as well.