fair enough points. I have been in the military, in a pretty good military infantry unit, and have seen combat and trained and led men for combat.
the military works in what should be a cost effective manner - I have never heard of a situation, in my army (Israeli Defence Forces) where a person was actually in a situation where a knife was usefull in an actual battlefield due to weapon malfunction - again, that basically means that your weapon malfuctions, you are facing somebody with a malfuctioning weapon and there is nobody around to help you. if you are facing somebody whose weapon hasn't malfunctioned, a knife isn't going to help you, for instance. if you have people around, they will cover you. the chance that you will actually use your knife is extremly small. the amount of time that was spent training you on that could be used better.
as to the lethalness of a knife - I would respectfully submit that anyone who says that a knife is more lethal than a rifle doens't know what they are talking about. you know the best way to kill a sentry? get 2 or 3 meters away and fire a half dozen rounds of 5.56 mm rifle ammo through his upper chest from a silenced rifle. a hell of a lot more lethal that trying to cut his throat. a soldier has no business getting into a range that is to close for a firearm to work. even in anti-terror opperations, firearms are a great deal more effective than knives.
as to fixing a firearm in the field - the vast majority (maybe 99%) of malfunctions with a modern rifle can be fixed in a few seconds by a trained soldier. typically the only ones that can't be are when the shell casing splits and gets jamed in a barrel. for example - I probrably fired a quarter of a million rifle rounds and soldiers who reported to me probrably fired another 20 or 30 million rounds, and I never saw this actually happen. the best use of a sodliers time, in training, is to teach them to handle their personal weapon as well as possible.
about armor - I don't know what type of armor the US army uses, but I don't see how it isn't stab proof. I think that what you mean is that it only covers part of the body, although I may be wrong. we used vietnam era flac jackets, and they would stop scrapnel and knives, and then we had ceramic plates on a small part of our chest and back that would stop small, low velocty rounds. my understanding is that the armor is better now, not worse. also, you have on a helmet, 8-12 magazines, various other gear that is pretty thick and surounds your vitals. it isn't that easy to get to the vitals of a soldier with a knife.