Bungie thought that between the SMG and the Battle Rifle, there would be no need for an assault rifle.
The MA5B from Halo: Combat Evolved behaved more like an SMG rather than an automatic rifle; limited accuracy, withering fire at point-blank range. Bungie decided to create two separate weapons to replace the MA5B to better balance out gameplay. The new guns were the BR-55 "Battle Rifle" and M7/Caseless Submachine Gun. The BR-55 retained the stopping power, penetration, and accuracy that a full-sized automatic rifle should, and the M7/C had the rate of fire and penetration that an SMG should.