It's just that there are better tools for the job.

Light MG's, in general, are great for directing disabling bursts of fire into a stationary but unfortified position. Using them to mow down lines of advancing enemy infantry may have worked well in WWI, where there were prepared defensive positions with limitless supplies of ammo, and grunts marched straight into gunfire across open ground. That was almost a century ago, people are smarter today..

For jobs like taking out fortifications or armored vehicles, you don't need lots of bullets, you need bigger ones. Someone once discribed a submachine gun such as a Thompson or a STEN gun (what Euros call a machine pistol, because it is chambered for pistol ammunition) as suitable only for killing someone in a phone booth. It has little general battlefield utility.

For infantry applications, a crew-operated light machine gun (chambered for rifle ammunition) is great for defensive positions, while an automatic rifle like a BREN or a BAR (also chambered for rifle ammunition) is more portable and usually favored to support an infantry squad's offensive operations. Modern jungle and urban warfare is usually fought at closer quarters with everyone carrying fully automatic assault rifles and lots of lighter, smaller cartirdges, so these distinctions are starting to disappear.

You're right, one major function of infantry small-arms fire today is supressive, to keep the other guy in his hole until you can call in your heavy stuff. But this only will work as long as you have enormous logistic advantages over your enemy. We haven't fought a war in a long time where our troops needed to practice fire discipline and make every round count.

The only reason I brought this up is to point out that sheer firepower is not the only factor military planners must consider. Tactics, maintenance and supply issues, as well as training considerations also play a decisive role in weapons selection.