That is not the exact reason. The exact reason being, if you hold the gun and aim at a human sized target....what happens is that beyond 300 m, the human sized target gets smaller than the front iron tip, so you cant aim exactly at a body part for example. At more ranges, the target will get smaller and the bullets may pass around the target.
View attachment 837796
At 100 meters, the target is clearly observed in detail and facial features are distinguished
At 200 meters, the target is clearly observed. There is a loss of facial detail. The color of the skin and equipment are still identifiable.
At 300 meters, the target has a clear body outline, face color usually remains accurate, but remaining details are blurred.
At 400 meters, the body outline is clear, but remaining detail is blurred.
At 500 meters, the body shape begins to taper at the ends, and the head becomes indistinct from the shoulders.
At 600 meters, the body appears wedge-shaped and headless.
300 meters is the maximum, generally applicable for majority of battle and assault rifles.