I have a 200w in a 16g. :O
Anyway is this the reason his heater blew up?
I don't think it's the reason your heater failed. However, having such a large heater in a small tank is less than ideal and kind of a waste of money. The larger heaters have much larger heat sinks, so even when they turn off, they will continue to heat the water.
Look on RC and you'll find a thread or two about the 150w NeoTherms blowing up, and occasionally a 200w as well (as is the case here).
I swear it's dozens and dozens of guys with this problem. That one main RC NeoTherm thread is about 10 pages of horror stories since February. Wasn't sure if that above issue was being pointed out as a possible cause to this, but I think most of those guys had their heaters explode and they were in appropriately sized tanks. One guy lost over 3k worth of stock, corals and fish.
I checked Reef Central. It looks like a handful of people with the problem and a cobalt rep even came on and said that they have sold 13,000 heaters and only 3 confirmed failures at the time. The problem heaters seem to be with a specific run of heaters and a manufacturing flaw. It might be that people are just chucking the heaters, but I just don't think this is a widespread problem since these heaters continue to have 4.5-5 star reviews on BRS and MD. Even on the RC thread, everyone that was having problems is giving the company props for their service and handling of the issue.
The guy that posted that he lost 3K of fish has 1 single post on reef central (the one bashing the heater). One other guy claiming problems had 12 posts, most in that thread. Another guy claiming to have problems only had 18 posts. RC is full of trolls, you can't trust everyone that posts there.
Heaters suck. Heat, water and electricity are a bad combination over time regardless of how well the heater designed and manufactured. When I first set up my tank my Eheim heater failed after about 3 months. The replacement Eheim heater (purchased from a different LFS) exploded about two minutes after putting it in the tank. Other people have phenomenal experiences with Eheim, but googling "eheim heater failure" would make you think that the company is purposefully trying to electrocute every aquarist on earth by selling the crappiest heaters known to man...
My suggestion is for the OP to call Cobalt and ask for a replacement. From what I've read, they are going to take care of you. They'd probably give you a more reasonably sized heater as a replacement if you ask...