It does seem too expensive and complex for a mass issue weapon. The same goal could be achieved with a blend of M-16A2's, .30 caliber rifles, and M-79 grenade launchers. The .223 aka 5.56 x 45 can be quite effective to about 600 yards, provided the proper bullet is used. The .30 caliber rifles are easily effective to about 1200 yards (Marine Sniper experience).
The choice of a .30 caliber rifle would probably be between a really good bolt-action rifle, such as the one used by the Marine Snipers, or a really good self-loading rifle such as the Knight SR-25, which is equal in accuracy to any bolt-action rifle. Personally, I would lean to the SR-25, because the self-loading feature would soak up some of the recoil sharpness, making shooting easier.
I dont know if they are .30 cal rifles but the Marine Corps is toying with assigning one [or two] rifleman per squad with sniper rifles and using them for movement cover as well as target identification.