The AR platform is customizable in countless ways, and can be built to perform one specific purpose very well. For example, and AR with a 24" barrel and decent scope can be an ideal coyote or varmint rifle. Accurate, low recoil, and readily available follow-up shots. A handgun will not suffice.
Its a hobby like anything else, much the same you put wheels on your car you can customize your rifle. The manufacturers whom make parts for the AR/M-16 are plentiful, offering a variety of personalization you can add to the rifle.
Then there is the "what-if" conspiracy theorist extreme survivalist type. If mayhem is unleashed and you need to defend the life yourself and your family and protect your food and belongings a handgun will not suffice. This could be of a civil magnitude, or an invasion from another country where militia is needed.
Once could also argue the civilian market generates revenue to fund R&D of better equipment used in the military.
The second amendment helps prevent corruption and maintains semi-honest government.
Do I personally feel I NEED to own one? Not really.
Do I have the RIGHT and WANT to own one? Absolutely.
Do some people NEED a so-called "assault rifle?" Probably.