Just a few comments on the subject from a different angle:
If I had been offered my "service weapon(s)" when I was discharged, I would have turned them down.
For starters, even though I had an M4 much of the time, I was officially issued an M16A2. It was complete crap and should have been scrapped. All of the M16A2s assigned to my unit were just as bad.
On top of that, it was a hunk of crap.
And, lastly, it was a piece of crap. They were all worn out, unreliable, and in desperate need of replacement.
Conversion to semi-auto would be a waste of time and resources. Plus... to make an M16 "semi-auto-only" you really need to replace the lower receiver. And I don't think taxpayers would like forking over the money for receiver replacement.
The M4 isn't viable at this point in time, since barrel length would be illegal in civilian hands. Trying to write in exceptions to Federal law for prior-service members would result in sweeping changes to firearm law, and we probably wouldn't be happy with all of them. It's a can of worms best left sealed for now.
If, due to the circumstances of the M16A2s being in such disrepair and the M4 illegal, I was offered my M9 instead... I'd turn that down as well. I hate the Beretta 92 / M9. It's too big, too heavy, anti-ergonomic, and has a backward safety in a stupid location.
I'd rather walk away with a voucher for 200 gallons of AvGas than any of my service weapons.