dd command indicates not enough disk space - trying to format sd card for raspberry pi

-rw-r--r-- 1 root root 10485760 Mar  3 22:04 /dev/sdb

/dev/sdb is a regular file, not a device. You must have run rm /dev/sdb at some point. It is created automatically when the device is inserted, but when you run commands as root, you can mess up with it. Now that /dev/sdb is a regular file, it's stored in memory, on a filesystem which has a low size limit because it's only meant to contain device files that have no content as such since they're just markers to say “call this device driver to store the contents”.

Remove the file (rm /dev/sdb as root). Then, to re-create the proper /dev/sdb, the easiest way is to eject the SD card and insert it back it. Once you've done that, you can copy the image with the command you were using, or simply

 </home/user/Downloads/2017-02-16-raspbian-jessie-lite.img sudo tee /dev/sdb >/dev/null