The M-16 would be superior, if chambered for a better round.
...and if its gas system contained a buffer piston instead of venting directly into the bolt/bolt-carrier/breech interface...
...and if it wasn't built to such close design tolerances that a single grain of sand can jam the forward action of the BCU...
etc...
the '16 as it finally came out was not one of Stoner's better ideas, IMO
By better do you mean bigger and heavier? I think I read an article stating that due to improvements in marksmanship by US soldiers, the Army would rather have a weapon with bigger rounds that can stop an enemy with one round.