Original AR's had a longer barrel and hence, a longer sight radius. When they went to the carbine version the same sight/gas block was kept for ease of manufacture.
As for being a short range weapon, They are reasonably accurate out to 500 meters. For all practical purposes, that is a long distance for a combat situation.
I have shot my AR15-A2 with a standard length 20" match barrel quite accurately out to 600 yards.