Gas length determines timing, and timing on the AR rifle is 5-7 inches from the muzzle. What happened with carbine gas on 16" barrels is the BATF requires an SBR tax stamp to purchase the 14.5" barrel that is military issue.
Makers side stepped it and assembled the parts on 16" barrels. The timing is too soon at a much higher pressure and that's why they are overgassed. There is no military issue midlength gas barrel - bayonets have nothing to do with it, it's about competent shooters demanding the gas timing being correct, not just accomodating the sales department. It's not just Armalite - they bought the name, it's not the same company - most of the AR makers use midlength gas, even with low profile gas blocks under full length rifle free floats, where bayonets won't be used.
Is it the full-auto BCG that's not the best quality? Being full auto has nothing to do with material selection, precision machining, or adhering to the appropriate types of surface treatment.
What uppper or lower receiver is of better quality than one made from a 7075 forging? Again, the type of material doesn't necessarily determine quality, the original M16's were 6061T6. Most new variants are using polymer lowers and extruded uppers, including the FN SCAR and Remington ACR. It's not necessary to forge 7075 and make that the receiver. It's a low stress part, anyway, the barrel extension is the stressed part.
How are military barrels lacking in quality? The choice of steel is determined by it's resistance to full auto fire, not accuracy, and the cheapest steel possible is specified- not the best performing steel.
Is the choice of steel? answered.
The machining? Issue rifles use the buttoning method, which basically is a carbide die pulled through a drilled bore. It's not the recommended best method for cut rifling, nor is it the least expensive on a per unit basis. The buttons deteriorate after a number of uses - but that doesn't mean the barrels are unacceptable, as the requirement is 2MOA.
Are they made out of tolerance? Yes, some have been, there's an administrative system to prevent it - but the Army did force Colt out of the bidding process due to major quality problems, and gave contracts to FN.
The chrome lining? Chrome requires the barrel to be buttoned oversized, then plated back - all to improve resistance to full auto fire eroding the throat, and to protect the bore from corrosion. Plating the bore to dimension is much harder to control, and the barrels that don't pass airgauging may not get shipped, but still contribute to the cost of manufacture. Hammerforging is much more reliable with less defects.
What choice of receiver extension is of better quality than one forged from 7075? Specifying an alloy has nothing to do with production accuracy or final acceptance. For an interesting discussion on whether it even means anything:
http://www.ar15.com/forums/t_2_27/207725_AR10_Receiver_Extension.html
Are the small parts, springs, fire control groups, pins, or controls sold to the military not the best quality? The parts are cast for the least possible cost, not necessarily for the best overall longevity, or finish. It's a combat weapon with a 20 year life, and then refitted, placed in another army as Lend/Lease, or destroyed. They're commodity tools, not heirloom keepsakes.
If not, what are? That invites an incisive answer pointing out the merits of stainless steel target barrels, hammerforged nitrided barrels, 9510 alloy superbolts, any of a half dozen specialty drop in triggers, Tubbs springs, Wolff springs, and need I mention Magpul magazines, which outclass issue mags so much they are what the Marines issue exclusively in Afghanistan.
Milspec means standardized contract language that was negotiated with the makers, not leading edge methods of gunmaking. Please note, the majority of European rifle makers use hammerforging and have since the 1970's, and most American handgun and sporting arms makers do, too. If anything, the AR15 is about the last large scale production barrel that's button rifled. Once the spec changes, that will go away too, leaving just a few specialty barrel makers doing small production lots for custom guns.
FN offers hammerforged barrels on all the rest of it's production. And those rifles are classed as 1MOA guns. Which is higher quality, a barrel that shoots a 5 inch group at 500 yards, or one that shoots a 10 inch group? Milspec is ten inches at 500yards, with issue ammo. Is milspec ammo the most accurate and highest quality? No, and neither are issue M4's or M16's.
Entirely the reason for the National Match parts used in that competition. They provide much more accuracy and enhance reliability.