M203, not M79
The M79 ws more or less a single-shot shotgun like device, the M203 was the underbarrel design.
With that said, the only way I can imagine the underbarrel design not being adopted was if something better took its place. Rifle Grenades took too long to prepare, and required the bullet-trap approach with was somewhat inflexible tactically. Troops LOVED the M79 and M203, particularly when the flechette rounds were introduced to go along with the grenades.
Suggestions for something better to replace it?