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I don't think the M16 wears out that fast or most rifles for that matter. I don't ever remember M16's being out of action when we went to the field.
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You run them hard enough, they'll break (as will AKs or anything else made by man). This won't be aided at all by shooting reloaded ammo manufactured to looser tolerances than factory spec ammunition. The reason that almost all the Garands offered for sale by CMP today are mixmasters from an assortment of manufacturers is not because that's how they built Garands back in the day, it's because after service in WW2 and then Korea rifles were pulled out of service and sent to be repaired and rearsenaled. Many of those weapons probably didn't need it, but that process should shed some light on how hard wartime service can be on a weapon.
Add in normal wartime attrition -- weapons lost, damaged, or destroyed on the battlefield or elsewhere and you've got a reasonable need for additional weapons (hence, for instance, the M16EZ). Add in the fact that neither MilGov, nor CivGov, nor anybody else has unfettered control and access to pre-war stockpiles of rifles any more than they have access to anything else and you've probably got a situation where there are a lot of M16s and M4s floating around in CONUS, but not much to speak of for warehoused weapons and spare parts at the command of MilGov ready to equip refilled ranks of military units. And a situation where MilGov and CivGov both need weapons -- whether that means finding enough parts or machinery to make new M16s, or a new design, or whatever.
I don't see any new production M16s coming off a production line anytime in the early 21st century. The design requires too much quality aluminum and other relative exotics to field. I see it being the mainstay of MilGov and CivGov (and common with New America and various warlords, etc.) but as far as production goes it is a legacy system and operating costs will rise as time goes on. Fabricating replacement pins and springs is feasible, but other components like bolts will be rather more problematic. Building or rebuilding rifles from used or new components that are available is a possible partial solution, if the faction in question has access to someplace where parts are stockpiled.
New production would require a design that was streamlined for cheap production -- "good enough" definitely being the enemy of "best" in this case. For MilGov and CivGov, without any existing tooling for such a design, I think they'd be looking at some new design or backwards engineering something like an AR-18 or AK, with ease of production being the most important criteria. (And I agree that a copy of an AK wouldn't work, for political/appearance reasons, but cosmetic differences could easily cover up something close to a direct copy internally -- i.e. the Galil or even more so the Sig 550 series.)
It's entirely possible, given how fragmented things are circa 2000, that you'd have a situation where different cantonments loyal to the same government would be pursuing different solutions to the same problem. You might have a cantonment on the east coast that was supplementing their M16s with FAMAS they traded with the French for, one in the middle of the country that had access to enough intact rifles or spare parts that they were able to get by with nothing but M16s, and a third on the west coast that was making a pressed/stamped select fire 5.56mm rifle similar to the StG-44/AK/AR-18 to supplement their 16s.