Because the Air Force did not want the forward assist. Their contract specified that they did not want the bolt closure device according to the Small Arms Review. If you get a chance to look at their M16 guide you'll see that the 603 was the M16A1 with the forward assist for the Army and the 604 was the M16 without the forward assist for the Air Force. That's OK though, Colt still stuck them with notched carriers for spite! Actually, it was for standardization purposes.
Colt made two versions of just about everything and some had the forward assist and some did not. It was easier for them to shave the F/A hump off of the A1 forging than to acquire more slick side forgings at the time they filled this particular contract. Don't ask me why, I have no clue about that.