.223 is not legal for deer in some states because it can mortally wound without a quick kill. Which is inhumane. And ruins the meat.
However, in war that can be considered the goal. A single mortal wound can tie up multiple support personnel, which is better from a strategic standpoint.
Also, most of the .223 rounds available to civilians are FMJ which don’t do the desired amount of damage because of over penetration. That said, I sure don’t want to get shot with it. Even with cheap target ammo, a good marksman can pump multiple rounds into a single target very quickly, increasing the odds of hitting vital organs.
IMO a lot of discussion about caliber are academic outside of the battlefield. Guns and bullets are nasty stuff, which is why we need to carry them to use on the bad guys. There are more of us than them, so if we are armed they will be the losers.
You are entirely correct. I own a Remington 700 chambered in .223 with a very fine scope mounted. I would never use it for large game for reasons cited. It would do just fine against some human assailant should the need ever arise.
Both the 55 gr FMJ M193 5.56 and the 62gr FMJ M855 5.56 are available to civilians. I use the M193 in my Stag Model 8 and the M855 in my Rock River Arms upper/Colt lower with a 20" barrel. The M193 will tumble after it enters the human body and cause extensive damage. The tradeoff is that it is more easily deflected by brush and twigs than the M855. The M855 has a longer effective range, but it can over penetrate. This was the problem that the Marines faced in Fallujah during Operation Phantom Fury. The Jihadis were hopped up on drugs and shots to the body often would not stop them because of over penetration. Head shots were effective, though.