Army tested steel cased ammo in m16
Vietnam War: M-16 M-14 and Other Rifle Groups: Department of Defense Reports, Field Manuals, and Training Film
about half way down the page in the link you'll see where the army tested a batch of about 21,000 rounds of steel cased 5.56 ammo in m16 rifles.
the army deemed it good enough except for it rusting after being exposed to the elements.
now i have seen mall-ninjas go on and on about how bad steel is for an AR-15,m16--LOL
i would think that a 21,000 round test would be pretty solid in facts.