Sounds like simple math, except that you're forgetting the .5" overlap for the threads.  [:)]  Most barrel configurations are at least 16.25", so that there's no possiblity if BATF measuring your barrel and declaring it 15.99", and therefore illegal under NFA.

-Troy

That would work, though you'd need to have the gas port opened up a bit to compensate for the loss of barrel in front of the front sight.

You do realize that you'd be losing a considerable amount of velocity with such a short barrel, while increasing muzzle blast and flash.  The velocity is a major concern if you intend to use this upper on a *weapon*, as .223 (particularly military FMJ) requires heavily on velocity for its terminal ballistics.

-Troy