It did take off, It was one of the first weapons chambered for 5.56. I think what made it not as popular was the fact that many countries were banking on the 7.62 nato.
I did see a Larry Vickers video where LAV said the 5.56 roller delayed blowbacks was not the best model for some reason. I think something to do with pressure or the excuse that people try to justify 9mm over 40. Muh high pressure. However Larry Vickers was a delta guy so I do tend to listen to what he says.