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I have to ask, why didnt our military go to this version over the standard issue one? Seems like a no brainer specially when they were testing the Sig.
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Because it didn't exist then. The G didn't come out until well after the M9 was adopted. The XM9 only required there be a way to decock the gun without using the trigger. They didn't care if there was a safety or not involved.
Switching to G's to remedy a problem that few GIs actually encounter is unlikely.
Once it was adopted, getting the Army to change it wasn't really going to happen. In the overall scheme of things, the military wasn't having problems with the safety switch the way it was, so it wasn't a problem to solve. You're looking at bean counting in action.
Remember the GAO bean counters recommended that the DoD drop the XM9 program and just continue to but OTS .38 revolvers.
Getting funding for legacy systems is a two-edged sword. If you start upgrading a legacy system, you get Congress asking why you need money for a new program. Alternatively they start asking why you are spending money on a legacy system and not requesting funding for a new program that can bring jobs to their district.