You think exactly like I do, BluEyes. I always wondered why rifles like the AR, FAL, G-3, Galil, etc. have all that barrel out there to put the front sight on, but they stuck it back at the gas block. Is it to save some miniscule amount of weight? Did the designers just think it looked cooler that way?
The proper way to set up iron sights is not too hard to figure out... longer sight radius allows for more precise aiming and has no downsides. So the rear sight should be at the back of the receiver, and the front sight should be at the tip of the barrel. As far as self-loading rifles go, it seems like John Garand was the only one who had the right idea. Eugene Stoner put the rear sight in the right place but screwed the pooch on the front sight. Mikhail Kalashnikov put the front sight in the right place, but totally flubbed the rear sight.
There is a version of the AR called the "dissipator," which does what you describe. It has a low-profile gas block that goes under the handguard, and it has a regular gas block front sight (with the gas block obviously inactive) mounted out at the tip of the 16" barrel. It uses rifle-length handguards.
You can construct such a setup yourself, using any type of gas block front sight base you want... railed, folding, or factory fixed. This will make your sights move less MOA per click, but this isn't a big deal since the MOA values are AFU on anything with the square post front sight or the carbine-length sight radius anyway. I would go with a free float tube instead of the factory type handguards, too.
Some guys get longer sight radius on an AR by using a really long free float tube that reaches nearly to the muzzle, and putting the front sight on the tube. I don't like this method, though... the handguard moves with any kind of pressure, like using a sling or resting it on a surface. For the best consistency and precision, the FS should be attached to the barrel (and the rear sight should be attached to the receiver).
Maybe this is fine if you just consider your iron sights to be "backup," but I am kind of Jeff Cooper-esque in my belief that you should always be prepared to use your iron sights as your PRIMARY sighting system if necessary.