I didn't fully understand the reason behind the M855's recent
lack of terminal performance in Somalia and Afghanistan. After
reading the JIDR article, I have a better understanding now. In
fact, the article went on to say that the American SF has turned to
a match grade round made by Black Hills that fires at 5g bullet at
792m/s from an M4.
In turn, that would mean that the actual effective range of a
5.56mm depends on velocity not only in the sense of energy
delivered on impact, but on whether it has enough velocity left to
tumble in its target and fragment. Thus, the effective range can be
much less than the range at which the bullet maintains a flat
trajectory, in this case 50m from an M4, or 200m from an M16.
As you noted also, a German 7.62mm NATO round does not fragment as
spectacularly as a 5.56mm round (are you using Cushaw's 1990 report
on terminal ballistics here?), but being a larger bullet, it does
great damage in its own right without depending on whether it
fragments, thus it would have a greater effective range. On top of
that, it's ability to penetrate most foliage and building material,
and still retain significant energy, is also significant.
The problem of over-penetration is a problem with ALL cartridges,
including the 5.56mm. If a bullet, even a hollow-point, does not
pass through enough tissue to fully "dump" its energy by tumbling
or expanding or fragmenting, then it would not have the necessary
terminal effect.
So, if someone is shot in the arm through muscle tissue rather than
the bone, he might still retain signicant combat ability. Even in
this case, I believe that the greater calibre of the 7.62mm round
together with its greater weight would have more impact than the
small, light 5.56mm round.