There is also the Scorpion SMG that is very close to handgun size but has the magazine in the "normal" SMG spot.

Two downsides with moving the magazine forward:
1. Barrel length becomes more restricted;
2. Centre of gravity moves forward away from the user's hand.
The Mauser C96 was often used as a carbine replacement with the wooden holster used as a stock, so problem 2 was countered. Problem 1 was never an issue because the C96 would have been a primary weapon, rather than a CQB/backup weapon which needs to be drawn in a hurry.
(Incidentally, Winston Churchill used a C96 at Omdurman when he rode with the 21st Lancers, as a shoulder injury prevented him using a sword).

All I can say in regards to all this: LOL! :p

It's good to always keep your small arms inventory current and be on the lookout for something better that inevitably comes along, but this, again? The service branches (U.S. at least) have got some weird neurotic process sometimes about deciding just what the hell they want in regards to small arms, yeesh.