I think the right answer would be to make the Grenade SMALLER, say 18.3mm or 12 gauge. Then the soldier could use currently developed shot, slug, baton, bean bag and rock salt rounds as required. A smoothbore grenade of that diameter would be able to penetrate ~10 times the diameter, or 180mm of Rolled Homogeneous steel.
The 40mm grenade is used in an urban setting by targeting just below the window the enemy is using as a firing port. That pushes the whole wall onto him. The Russians use a 30mm round the same way. The 20mm round is intended to shoot through the window, and then has to go boom inside, with all the fancy range finder stuff. Of course the soldier has to lase-range the wall, then stroke the distance measurement up a meter, then hit the open window. A simple one step has not become a 3 step operation.
Problem: What if the guy is shooting through a loophole, through a knocked out brick? The 20mm or 25mm is unlikely to shoot through the hole, and you are back to trying to blow out the wall, with a much smaller warhead.
I hope it works, but am frustrated that the smaller 12 gauge would be much lighter and more maneuverable. I see the grenadier becoming vulnerable, as was the M79 guy in Viet Nam, with no close quarters weapon. That was the problem that the M203 was supposed to fix, giving the guy a M16.
I submit that a 12 gauge with a 5.56mm rifle, both bullpup with downward ejection could be used ambidexterously, with appropriate weight. It could be so much better.
I'd like to see a 12 gauge grenade, too. They will never do it because they fear that the civilian black market will allow anybody with the money to get a box. I think it would be a great idea, of course, since I could use them in my Remington 870. Its the same logic behind the civilian 37 mm flare launcher vs. the 40 mm M203.