Wow, a lot of information is just plain out wrong.
First, we'll start with the decision to switch to 5.56. It was originally made after army trials. The 5.56 was designed to shatter upon impact. This created a nasty wound. They theorized that a single round was just as or more deadly then a .308 round. Thus, you can carry more rounds for less weight and be more effective soldier.
A couple of problems existed with this (we'll get to the m-16 itself later). The first is that the 5.56 does make a nasty wound (if it's moving fast enough to shatter), however it does not incapacitate. It takes anywhere from 1-5 bullets to incapacitate your target. Thus, based on the shear amount of bullets alone, the standard soldier is LESS effective carrying less weight, but more bullets.
Next, the AR-15 is a pretty fine weapon. It is the reason why the M-16 was chosen as the main rifle. However the M-16 was changed significantly from the AR-15 so that the gun can be made cheaper. Mainly, there were no cleaning kits, the rifling twist was changed to be absolutely wrong for the standard bullets given, and the insides were prone to jamming.
Now, shot for shot, it is debatable whether or not a perfect M16 is the equal of the M14. Most people would say it's not even close, but it's still up for debate. But the M16 wasn't used like the m14 was used. The m16 was used as a full auto gun. It was rare for it to fire a single shot (excepting when it jammed after a single shot). So the same amount of bullets of 5.56 is not equal to the same amount of bullets of .308
Next, clarification of terms. Assault Rifles are guns that carry intermediate bullets. Bullets which are more powerful then a pistol round, but less powerful then a full rifle round. Examples, M-16, Ak47, L85... A battle Rifle is a gun which shoots a full rifle round. Being able to shoot full auto is not a requisite. Examples, Galil, M14, FNFAL...
I beg to differ. that's precisely what it was designed for.. the first 'assault rifle' was the Russian SVT-40.. firing the massive 7.62x54 round. Hard to find one with a barrell that's not shot our these days. When the Germans began capturing them in 1940, they sent 'em back for evaluation. The troops, meanwhile; kept a fair number themselves and they employed it as a sniper weapon... a testament to it's accuracy and the ability to shoot multiple times (10 round mag) without any body movement as required with a bolt action.. sniper position isn't given away.
Absolutely wrong. The first assault rifle was a russian weapon from around the end of WW1 (I always forget the name of it). But if we were to ignore this gun, the first assault rifle is the M1 Carbine. If you analyze it, you realize that it really is the first assault rifle. Intermediate Cartridge, large magazine capacities, ease of fire, ease of aim, a decent range for such a small cartridge, and mostly it's ability to be altered to Full Auto. A good number of M1 Carbines had the sear pins filed down to make it full auto. At the end of WW2 the gun makers analyzed this practice, and just started to issue M2 Carbines. They were the same thing, except that they had selective fire.
Anyway, I personally think the problem is not the 5.56 round, but the "One for All" mentality. I believe that the mixed weapon squads of WW2 and Korea (especially on the american side) are the real answer to the problem. The mismatching of ammo is not as much of a problem as some people would have you think. If I had control of a squad of 12 guys, I'd do this: 4 M16's, 3 M14's, 1 DMR, 1 SAW, 3 UMP45's. And then I'd split extra MG ammo between the SMG's.