Given the videos I have seen of forces in Afghanistan fighting at more than a couple of hundred yards, I would be inclined to say that the problem isn't with the M4 or 5.56 ammunition. The problem is hitting the targets.
I keep getting drawn back to this video as an example...
http://atwar.blogs.nytimes.com/2010/04/19/a-firsthand-look-at-firefights-in-marja/?hp
The Sgt. can see "squirters" with his naked eye just fine, yet his Marines seem to be having real issues with landing shots on target despite only being a few hundred yards distant and so probably within their qualification range of 500 yards which is within the range of the platforms being effective. The Marines have ACOGs which means they probably have 4x magnification. Their targets are going to visually be at 125 yards or less because of the magnification. So seeing the targets isn't the issue.
Until getting panicked because of "accurate fire" that "must be from a sniper," the few guys that were shooting were doing so at their convenience and you see several guys that have no qualms with just walking around in the open. Guys moved to and from the low forward firing position with little sign of concern for their safety. Most of the guys in the low forward firing position are seating such that their upper chests and heads are fully exposed. The point I am making here is that in this firefight, the Marines could see their targets with the naked eye and for much of the fight operated fairly openly due to not fearing getting hit, and were able to take shots in a leisurely manner, but were not hitting their targets.
It doesn't really matter what you use if your rounds aren't impacting the target. Heck, you can shoot a frigging ground to ground missile at your opposition, but if it hits the wrong cluster of buildings located several hundred yards off and away from the intended target and kills the wrong people, it isn't going to help you win the battle.
Taking back the half kilometer is doable with the current platform, but at the far end of its capabilities, but it won't matter what platform is being used if the soldiers don't have the training and marksmanship skills to be able to actually hit their intended targets and to be able to hit moving targets. Leading a charge of three steps and yelling "C'mon let's go let's go" and firing from the shoulder at the same time isn't likely to be putting rounds on target either.
Before anyone notes CJ Chivers is part of the liberal media who doesn't know what he is talking about, he does. While he did graduate from the Columbia Graduate School of Journalism and is a Pulitzer Prize winning NY Times journalist, prior to his current career he had graduated Cornell in 1987, joined the USMC and was an infantry officer until 1994 and along the way graduated the Army's Ranger School and was in the first Gulf War or left the military as a captain.
I was watching Bomb Patrol Afghanistan. The convoy had come under attack and folks are firing from directly operated .30 and .50 caliber machineguns, and indirectly operated (fire by wire) .30 and .50 caliber guns sighted with termal cameras and having considerable magnification. The fire by wire guns were fired from the safety of armored vehicles that afforded ballistic protection. From the thermal cam video, you can see the targeting crosshairs and the impacts of the rounds. Despite being able to see the targets and seeing where the rounds were hitting, fire wasn't being corrected and so the Taliban fighters weren't getting shot. Distances were well within the effective ranges of the guns. If you don't hit your target, then you can't be as effective in neutralizing the threat.