They were in fact design issues. That is why Sig changed the design.
Just off the top of my head they changed:
The magwell, they changed the mag shelf from aluminium that was getting destroyed by the use of steel mags (sig shipped and designed the rifle to work with plastic mags, who designs a gun to take AK mags and doesn't build it to work with the most common and most proven mags around?), to steel.
The chamber dimensions along with extractor, ejector, bolt face, firing pin, and hammer spring. The Sig 556r couldn't reliably run steel cased 7.62x39. Again I'm not sure what kind of genius builds a gun designed to shoot that cartridge and makes it so it will not run with the most common ammo available. These changes were supposed to remedy that issue.
Google should find you the complete list of changes. The point is it was not a QC issue, i.e. it wasn't poorly made, fitted, or assembled parts, etc. Rather, there were flaws in the basic design and the design its self was changed.
Now whether they are now making a good rifle is, in my mind, still an open question. The only person really pushing this rifle is convicted fraud and all round shyster Gabe Suarez. If anything that actually probably hurts the rifles reputation. I'd take anything coming from him, his forum, or his sheeple followers with more salt than is found in the dead sea.
Here is a new one:
http://www.youtube.com/watch?feature=player_embedded&v=8txwWja1EbU
I've also read a number of places that the new 556R guns unlike some of the other sigs are bare steel barrels and not in fact nitraded as some say. Its something I've not researched a ton, but would definitely be looking into before I bought.