Skans,
Why would anyone bother to make something that never really caught on? While it seems the terminal velocity was decent, the research i did showed that the initial velocity was low. In close distances, it may not have time to accelerate to effective velocities. Since it is actually designed as a rocket, its range may also be limited.
More likely than not, the gyrojet is the answer to a question that nobody really asked. It was less reliable, probably more expensive, and required specialized weapons to fire them from.