I believe that our troops are able to hit targets with some frequency at those distances when equipped with optics. At least I know Marines are capable of doing so, can't speak for the average Army grunt except to say many of those I observed probably couldn't since they were never given good marksmanship training to begin with. Which needs to change. As for terminal effect it still depends largely on shot placement, but at longer distances the M855 is not all that effective unless vital organs are hit (not enough energy for hydrostatic shock or fragmentation). Furthermore, the M855 round is not particularly efficient in the ballistics department, especially from the silly little 14.5" bbl of an M4, so maintaining enough accuracy at that distance to get good solid hits is a bit suspect. The bullet is too susceptible to wind drift to offer much in the way of long distance accuracy. The heavier 77gr pill is much better in this regard, but still not as good as say a 120gr 6.5mm.
Again you make the argument about using heavier weapons, well look at the ROE's in either the Iraq or Afghan theater and you'll find that many of those heavier weapons are gross verboten in many circumstances. I've dealt with it first hand, and I am not interested in armchair quarterbacks just suggesting using something you can't use. Reality is reality, when you are fighting an insurgent war you can't go lighting up everything with an M2 or a MK19.
To answer your question on terminal performance, yes the bigger hole is worth the weight, the heavier ammo that can penetrate better is worth carrying. I routinely carried over 300 rounds of 5.56mm on my person in Iraq, yet in the various firefights I was involved in I rarely fired more than 60-70 rounds, the majority of which were not needed except for suppression (which I am not too fond of doing, but orders are orders). So I can see giving up some ammo capacity for a more effective round and being just fine with it, or just carrying more weight if I had to. Also given a choice between getting shot with a M855 round out of an M4 from 500M out and taking a .45 230fmj at 7 feet, I would take the M855 every day and twice on Sunday. I think you would too. Bigger bullets create more blood loss, more blood loss kills targets more effectively. Poking holes in a target does not equate to effective terminal performance, and at 500M a 5.56mm round is not going to fragment, may not even yaw, and is not going to be all that effective. Never mind what happens when even light cover objects, are encountered.
As for training being restricted due to costs of replacing the 5.56mm with something more effective I would argue that we cut some spending from the Air Farce to make up the difference, seeing as how they are being replaced by armed drones that shouldn't pose a problem. By eliminating just a few over priced aircraft you save enough to have grunts shooting every week for a year or more.
The Armed Forces are resistant to change weapons and caliber for budget and training reasons (because those making the decisions are REMF's). It seems that many on here are resistant to the idea because of some fondness for the AR platform and the 5.56mm. Maybe some of you will feel cheated if it is found that your pet rifle is really only marginally effective as an infantry weapon due to the relatively puny cartridge it is chambered for. I own an AR-15 chambered in 5.56mm, and it is fun to shoot and I enjoy it. I do not however have any delusions (as some here seem to) that it is the end all be all best answer as an infantry weapon. It is far from it in my opinion and experience.