8 inches from any AR isn't acceptable, no way, no how.
Looking at the target I'm gonna say the front sight has nothing to do with it.
Front sights on an AR need to be ridgid, Most are. That also have to be adjustable for elevation. You'll do most of your sight elevation changes from the rear sight but still need to get "some" elevation from the front sight.
Example. I sight my AR in at 200, click all the way to 600 on the rear sight. When I move to 1000 yards, I use my 600 yard zero and turn the front sight down 4 full revolutions down.
Many times on the old 'A1 or SP1 style, the front sight was bent so you got windage changes. You could live with it and make the windage changes or you could stick the sight in the lathe and true it up.
Front sight thickness is up to the individual. I like mine to be (when looking at the target the same thickness as the NRA 200 yard High Power target. Ideally I like the rear appature to be about 3 mm.
Now looking at the target I see several possibilities, 1: your not looking at the front sight (it should be dark and crisp, rear sight and target should be fuzzy). 2: You don't have a good position, with a good natural point of aim, including poor cheek weld, 3: Poor follow through. 4: The bipod isn't working for you.
Notice how all the shots are to the left, That by it self tells you you don't have a natural point of aim, You point the rifle in the direction of the target, mussle it until its where is suppose to be, then as you fire, you relax and that forces the rounds to the left. May have to do with the bipod not allowing you to keep your NPI.
The large group shows me you're not looking at the front sight.
This of course is just a guess from looking at the target, without watching you shoot.
I like the ideal you are asking to set down with someone to help you. Nothing beats a good coach.
I don't live in the Denver area but about 3.5 hours north (Newcastle WY). If you're willing to donate a weekend (or a couple days during the week) and come up to here, I'll spend the time working with you.
If you're willing to do that, I'll bet you lunch, you'll shoot a lot better groups at the end of the week end. I'm not the best shooter by a long shot, but I have coached the AK NG Service Rifle team for a good many years.
If you leave your bi pod home, it wouldnt' break my heart,
This is an ideal what a 100 yard iron sighted AR should look like, this was shot rapid fire, sling unsupported. To give you an ideal of the group size, the scoring rings are 1/2 inch apart.
Don't worry about the front sight cause I don't think its the problem.