I always tell people to also think about tread pattern as well as stance. If you get something with an aggressive tread and widen the stance, I don't think it looks bad at all. Personally for daily driving, I think it's perfect. I've been running 265/75's with a 3" lift and never felt like the tire size was an issue. But I also don't do nearly as much dirt driving as I used to.
Also agree with the others on keeping the load rating in mind. E is such overkill (unless you're doing some heavy rock crawling) on these rigs. So heavy and so stiff. I'm in the same boat right now. I've been really unhappy with my Duratracs, but it's one of the only all terrain tire made in 265/75-16 in a C load. I love the LC wheels I have, so I'd prefer to stay in them. But it's looking like I'll need to go up to 17's to get back into a C load BFG.