I've heard the 740 and 940 2 litre non turbos described as "underpowered", so how a V70 with a 1.6 would be described is hard to fathom. I think, though, that if someone offered me an S80 or V70 1.6 with that sort of MPG I'd consider it, certainly in the context of my 3litre 960 which does about 70 MPT (that's Miles Per Tank). Definitely think that the S80 sounds a better bet than the V70. 5 people and a boot full of camping gear might make for a sluggish performance at best! And then there's the roof rack and trailer to consider...
Seems like quite sound reasoning, and could well appeal to drivers for whom acceleration is less important than just getting from A - B. As far as the price goes, 22K is a lorra lorra money, but it sounds like an inexpensive car to run (and tax) so there might be savings in the long run.
m.d.
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