The range is fine... just as good as an M-16... *WITH THE RIGHT AMMO* The problem is, the GI M-4s have a 1:7 barrel twist that is insufficient for stabilizing the current 62gr M855 load in a 16" barrel (fine with 55gr). It works fine in the 20" M-16 barrel though. The 1:7 was originally designed for the 62gr bullet in a 20" barrel (55gr was designed for the 1:12 M16A1), but when the US started using the M249, they found it didn't function properly with the 55gr, so the 62gr replaced it. With standardization being king and all.... all we have is the 62gr now. There are a couple newer bullets being tested that work better in the 16" 1:7 barrel, but I don't believe they are in general use yet.
I have what is essentially an M4. A 16" AR with the M4 barrel, and a 4x32 ACOG. The big difference between mine and a real M4 is the 1:9 barrel twist. The tighter twist is sufficient to stabilize a 62gr round in a 16" barrel, so I can achieve the same accuracy (actually a bit better) than your run of the mill M-16.
edit: The ACOG is expensive because it is fucking QUALITY. It is one of the finest fit/finish optics I've ever used. But yes, the damn thing cost almost as much as my rifle (the world's most expensive AR project)