DISCLAIMER: INCOMING WALL OF TEXT! I have not used the M-16. I do not personally know any person that has used the M-16. My source for this answer is the Ichord inquiry, whose full report can be read here. I have only passing interest in firearms, but this debacle was not so much about the weapon in question as it was about bureaucratic mismanagement.
The M-16 was a replacement for the M-14, a heavier weapon, which was the previous standard. By 1967, the M-16 had seen combat for about a year and a half, and sufficient complaints had been raised by soldiers in letters to their parents that it managed to attract the attention of the House Armed Services Committee, which formed an investigating subcommittee. The subcommittee, headed by Representative Richard Ichord, a Democrat from Missouri, conducted a lengthy inquiry into the origins of the M-16 problem.
A bit of background before we discuss the M-16. Weapons designers discovered that a small, fast-travelling bullet often did a great deal more damage than a larger round when fired into human or animal flesh. General Willard G. Wyman, the commanding general of the Continental Army Command, had asked Eugene Stoner to design a rifle to take advantage of the smaller bullets. The AR-15, the precursor of the M-16, used .22-calibre bullets instead of the .30-calibre that had long been standard for the Army. The Army, for reasons that were partly technical but largely traditional, however, refused to change from the .30-calibre bullet, which it chose to describe as “full-sized.”
After World War II, there was a demand for a new infantry weapon that would be light, reasonably accurate, and capable of fully automatic fire. The Army’s response was to build the M-14, adopted in 1957. This was essentially an automatically firing version of the Army’s previous standard, the M-1. Like the M-1, it used a large, .30-calibre round. Its disadvantage was that it was virtually uncontrollable when on fully automatic fire.
At around the same time that the Army was adopting the M-14, Eugene Stoner was completing his work on the AR-15. He was working for the Armalite Corporation when he finished developing the AR-15. The rifle combined several advantages. One of those was the enhanced lethality that came with its .22-calibre bullets. The smaller, lighter ammunition meant that the rifle could be controlled on automatic fire by the average soldier, because its kick was so much less than the M-14’s. The rifle itself was also lighter than the M-14. The decreased weight meant that a soldier equipped with an AR-15 could carry much more ammunition. This promised the elimination of one of the most basic problems in combat: running out of ammunition. The other was the reliability of the moving parts, which had an extremely low rate of jamming. The weapon also incorporated manufacturing innovations that drastically cut the cost of the weapon. The parts were stamped out—rather than hand-machined, as in previous rifles—and they could be truly mass-produced. The stock was made of plastic, to further cut costs.
The AR-15 was tested in 1958 at three military bases. The reports were favorable, but there were reservations from the ordnance establishment about the propriety of using such small-caliber ammunition. To reconcile the differences in opinion, the Army commissioned an extensive series of tests at its Combat Developments Experimentation Command, known as CDEC, at Ford Ord, California. These tests ran from the fall of 1958 until the spring of 1959. The report’s conclusion was that the Army should develop a lightweight rifle “with the reliability characteristics of the Armalite” to replace the M-14. After the CDE tests, the Army admitted the theoretical “promise” of the lightweight system but rejected it as a practical proposition. Emphasising the importance of having all rifles and machine guns use the same ammunition, the Army ordered full production of the .30-calibre M-14.