In AR15 / M16, as you go up in twist rates and bullet weights, accuracy goes way up. Why did the military settle for 55 gr when the higher weight bullets seem to be so much more accurate? I.E. real match bullets are around 77 gr. Does the extra velocity 55 gr cause more damage than a heavier, slightly slower bullet would?
Accuracy is not dependent on twist and bullet weight. A slower twist and 45-55gr bullet can still absolutely be a tack driving combo.
The issue with military ammo is that you have to balance barrier penetration, body armor penetration, and terminal effects in soft tissue, oh, and cost. 55gr ammunition hasn't really been used in the military for a long time. M855 is a 62gr FMJBT with a tiny little steel "penetrator". In combat zones, you will often see Mk262 77gr HPBT "match" ammo issued, also. It isn't a complete replacement, however, and honestly because of the increase in cost, I wouldn't expect it ever to be.
Another thing to consider when talking about small arms accuracy in the military, is the weapons themselves. We've finally just about got everyone picatinny rails, but they're not free float tubes (and often are not mounted correctly, and wiggle all over hell), so you still shoot yourself in the foot, accuracy wise. The Marine Corps is introducing M27 IAR's increasingly, which are very solid platforms, but are also very expensive. Most of the Marine Corps is still using a 20" M16a4.
Then there is the subject of how well trained the troops are to take advantage of whatever accuracy is there. In the Marines, we shoot for a 12" black circle at 200-300yd for slow-fire. 4-6 MOA target. You'd be blown away at how many people can't reliably hit this in a tight, slung up position (never mind that the sling is probably hurting accuracy because it's mounted to a non-FF rail....).
Sooo, with all of that in mind, ammo choice is pretty low on the agenda, even moreso that we're drawing down and getting out of Afghan. We've got V22 Ospreys and whiz-bang rocket systems to worry about.