In order to read Heller fairly, I think you need to realize that Scalia and the Court were under an obligation to preserve Miller if a correct decision in Heller was consistent with it.
Scalia is not saying that he agrees with Miller. But if one is bound by Miller, then one must take into account what it said.
Scalia correctly points out that one possible reading of Miller is that machineguns are protected [ and some concealable handguns might not be ]. He correctly points out that the Miller Court decision was consistent with the idea that short-barreled shotguns were not protected. The actual outcome of Miller is that the decision regarding the shotgun was never decided and therefor the law passed by Congress to prohibit such shotguns remained in effect.
Much depends upon the truth of the statement regarding "the historical tradition of prohibiting the carrying of dangerous and unusual weapons".
You and I and Scalia all recognize that a proper reading of Miller could make the ban on machineguns unConstitutional. The analysis of Miller which resulted in Heller is that Miller was incorrect to limit the scope of the right to ONLY Militia purposes.
A small step from Heller would be a decision regarding so-called "assault weapons". Certainly the self-loading center-fire rifle of military design is the direct descendant of the Revolutionary musket. There is no way that a Supreme Court should find that such a rifle is not protected.
Then it is another extremely tiny step to recognize that a select fire rifle is both useful to a Militia and would be the rifle of choice given the fact that the descendant of the musket described above can be manufactured for about two dollars more with a select-fire switch, without giving up any of its prior functionality.
What seems like a giant step to the anti-gunners is really just two tiny steps away, even with Miller's now-overturned narrowing of the scope of the protected right.
My concern with the future state of Heller is that it does not address the other "destructive devices" that should be protected. At such time as any conflict with a tyrannical government begins, Americans will be at a disadvantage in having to develop and manufacture such devices from a starting point of zero inventory. That was certainly not our Founder's intentions.
But I would encourage you to recognize that Scalia tossed out the narrowed scope of Miller and might yet be forced to deal with what is actually a very powerful ruling in Miller regarding the types of weapons protected.
The first atomic weapons yielded the equivalent of about 20 thousand tons of TNT. I see no indications that the "dangerous or unusual weapons" of which Scalia speaks would have precluded a manufacturer of arms from possessing twenty thousand tons of black powder in the years immediately following the Revolution.
That's not a correct pointing out. The Court, in Miller concluded "we cannot say." It did not conclude "short-barrel shotguns are not protected."
The logic that SCOTUS set out in Miller was that arm that is any part of the ordinary military equipment or [which] use could contribute to the common defense is protected.
If Scalia wanted to overturn Miller, he should have done so instead of lying his ass off. He's making a mockery of the legal process, and establishing himself as an outcome oriented hack.
Now, for the law being "what it is," I agree. The NFA is, by fiat and "magic" now constitutional. The government can ban private ownership of select-fire weapons, thanks to Scalia. I totally disagree with your conclusion that Supreme Court should find that the self-loading center-fire rifle of military design is not protected. Scalia directly asserted that m-16s may PROPERLY and CONSTITUTIONALLY be kept from the public. "See Miller" he says, where SCOTUS did just that for short barrel shotguns. That is, the 1934 NFA is Constitutional, so says Scalia. Get over it.