crossrhodes, as a not-as-old jarhead, I'd be glad to chime in. When I went to the Parris Island range in early '04 we shot the known distance range that Marines have shot for ages now. I think the observation that it isn't combat focused is indeed correct. As you've pointed out, it's not meant to be. I think it, my Drill Instructors, and Primary Marksmanship Instructor, did an excellent job of teaching me the basics of shooting a rifle and I have three expert qual scores to back that up (I missed shooting one of my quals because I was deployed).
In addition to that we fired an unknown distance range. This was a series of targets that would pop up at various ranges and then drop when hit.
Before deployment, my unit fired the short range course and received training in military operations in urban terrain and convoy operations. This entailed rapid shots at short range (25 yards and under), double taps, failure to stop drills (two shots center torso, one shot head), Shooting while moving, moving in, out, and around buildings, clearing houses, shooting from the top and back of 7-tons and HMMWV's and rapidly dismounting said vehicles to engage targets. That's just on the rifle handling side.
Keep in mind, my MOS (job) was communications, computers to be exact. You don't get much more non-combat than that! I imagine that the grunts get more training. Also, my buddies who are still in tell me that the short range course is now part of the annual qual.
If the KD range had been the only firearms training that I had received, then yes, it would have been inadequate. However, taken as a part of the whole training package, it laid an excellent foundation for later training to build upon and gave me a better understanding of my rifle, as well as the capabilities of the weapon and myself.
Criticizing the KD range for not being combat-focused is like calling driver's ed worthless because it doesn't teach you how to drive a race car.
Oh, and your comment about Marines knowing their sight settings was spot-on. My M-16A2 that I took to Iraq was serial no. 6035710 and the sights were 2 below flush on the front, 8/3 small gap on the rear elevation, and two to the left of center on the rear windage. Give me that rifle and I could put it on those sight setting blindfolded.