The max effective range of the M16A2 is 550 meters. It's hard to distinguish a man target past this range. But getting accurate fire at the ranges between 300 and 500 meters is important. The M16A2 sight is set all the way up to 800 meters. I would've felt confident setting the iron sights on 500 meters and having a go at a target at that range. The thing is, obviously, those extra inches of barrel weigh something. You have to sort of take your pick in the end. What do you want? A weapon that is effective at long range or a weapon that is easier to carry and good for MOUT type combat? Personally, I like to be able to shoot at something from a long ways off and have a reasonable chance of hitting it.
Not me. I'll take a weapon that is light and fast any day. When it starts to get close and personal, I would rather avoid boat anchors at all cost. Go ahead and have a guy or two in your squad with some extended range capability (something that the M16 can be configured to do quite adequately actually, if built right), but you'll want most of your guys using systems that are optimized for killing in the 200 meters and under range.