WHats so bad about a carbine length gas system on a 16" barrel?

Not much, as long as the gas port is .062 and you at least have an h-buffer.
You might experience more parts wear.

>>34940237
It's not horrible. But it is overgassed

It's alright, but a bayonet won't fit right and it will look weird. Carbine gas in general is a bit tough on the action

>>34940256
THEn why do manufactures make ARs like this? Colt 6920 Ruger Ar 556 and others are carbine length with 16"
Is it just to be milspec without the atf freaking out?

>>34940299
Because they're lengthening the M4 to the minimum non-NFA length, rather than shortening the M16 to minimum.

Just look for an extra 20 minutes and find a 16" barrel with a mid-length gas system.

>>34940299
>THEn why do manufactures make ARs like this?
Because they wouldn't have ever made them if it weren't for the NFA.