The military wanted the ball powder because it packs more of a punch.
I believe velocities were the same. The Military had lots of the ball powder available, and it meters very easily and accurately. The IMR powders, which were specified by Eugene Stoner, the inventor, are stick powders (rods about 7 times as long as they are wide) that are a bid more trouble to meter.
To make the ball powders, they have calcium in them to aid in the manufacture. The calcium would collect in the M-16 gas tube and eventually block it, causing jams.
That figures. I should have known the army had a stupid reason like not issuing troops repeating rifles during the war between the states because it was a waste of ammo.