Yes, it was as simple as you said.
I successfully enabled the sftp on my ASUS-RT-N16: Firstly, by following the instructions on this website to install Optware on my external USB hard disk. Secondly following your instruction here.
I am even able to use my LinuxMint11 to securely connect to it like a 'shared' folder on my desktop :)
RT-N16 on Shibby Mod
Tomato Firmware 1.28.0905 MIPSR2-070V K26 USB AIO Multilanguage
—> Update 20111106-Sun: Connected back to my ASUS-RT-N16 remotely with 'ssh' and 'sftp' using my HTC Desire HD :). Successfully uploaded some files.