I would think because there is no demand.
The only advantage would be that it would be more compact than a muzzle can.
Off the top of my head, the 3 main reasons for integrally suppressed guns are:
1. more compact for shorter overall length
2. to conceal the fact they are suppressed guns (bull barrel looking suppressed 10/22s for example).
Which would not be ideal for the M16 platform. I guess you could hide an exansion chamber in the handguard area but I don't think this would be feasible as it would be only served to try and achieve my next point below.
3. to drop the speed of sound down to subsonic velocities which then renders the 223 round to ballistics similar to a 22lr.
Dr. Dater of Gemtech himself has said many times that it is not worth dropping the velocity of the 223 round down to subsonic velocities since it would do just that.
So I'm guessing that you want to do this based on reason #1?
I have a Gemtech Predator which is only 6.5" long and am very impressed. No hearing protection needed but of course it does nothing to slow down the round so you still have the ballistic crack from the supersonic velocities.
Also, I would prefer not to restrict myself to using the suppressor on just one upper. I would like to have the ability to quickly move it around. Something you couldn't do w/ a integral unit unless perhaps it worked w/ the new MGI upper system.