It does sound like the (unfinished) block should be 10.5", so that the finished block will be 10".
Sometimes it's easiest just to compensate for things, like cutting HSTs a little bigger than they theoretically need to be so that they don't end up too small (which I do). If it's just the outer squares of the 16-patch that are too small, cut those bigger to start with so that they end up the correct size.
I would measure each individual square (of the inner squares) to make sure they're really 2.5" each first. Then you can be sure that the problem is just with the outer squares of the block.
But like SusuiQOH said, I wouldn't worry about it too much since it looks fine when it's all finished.