Timothy, 2 things about your posts
" Expanding gases forcing a mass through a cylinder and propelling it in the desired direction. "
That is one thing that is already changing with that "MetalStorm" system that was mentioned. In that system an electromagnet propels the round , the cyclic rate is limited only by the speed of electrons.
Heck, people have already built guns that work on centrifugal force instead of pressure

The other thing,
"Most of the gun innovations over the last 150 years were driven by the War Dept or Pentagon. We're not seeing that anymore and what's changed is private company development will stagnate due to a lack of funds. Competition today is driven by a commercial market with limited dollars to spend. It really boils down to who want's to take the most risk with no guarentee of return."
I think you, like Samuel Colt, underestimate the power of "commercial" sales. S&W focused on the commercial market, so did H&R and Iver Johnson.
One place we will see innovation now is in the Business model.
We now have the answer to "What is Cerberus up to?"
MB's podcast this week mentions that Freedom Group is going public, Think of it as "America's AR made by America's Company" because most of the stocks will be bought up by mutual funds to help finance retirements, same as with oil

Let me thump the bible of JMB for a second
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The last real innovation IMHO - and it died quickly - was the gyro-jet handgun. And this is where the answer to Why? comes in - the next innovation will be where an innovation in the projectile drives innovation in the delivery system ala the gyrojet.
I can't recall the name of the outfit more recently, went out of business too IIRC, but they had a magnetic multi-projectile launcher, could shoot thousands of projectiles electrically fired. Something like that. Or not, that is the nature of innovation - you don't know what will come or from which direction.
Update - the company is Metal Storm and apparently they are still around. - http://www.metalstorm.com/component/option,com_frontpage/Itemid,79/
Amen to that sermon

The reason the Gyro Jet never took off was it's awe inspiring lack of accuracy.
Instead of spinning to achieve stability in a straight line the little rocket spiraled through the air and it's POI could be anywhere in the diameter of the spiral.
Overload, the reason Ti. pistols faded out was because China bought a butt load of it and drove the price up 300%+
Why?
Cuz we are intensely curious tinkerers.

On the annaversery of the conquest of Mount Everest I can best answer your question by pointing out,
"Because it's there".