If Walt wanted to commit suicide, he'd be able to come up with quicker more painless ways to do it than ricin. I got the impression he wanted the M16 just for general on the run self protection.
It's not an M16, it's an M60, the belt-fed machine gun of Vietnam fame. It's a large and bulky weapon, generally operated by a team of two in service. For one person to operate effectively it pretty much needs to be in a fixed position, and Walt is not exactly Rambo. The implication to me is Walt would use it for defense of a "dug in" position, or a surprise assault on some hardened or well-defended target.
Oh, then it's totally for a cartel that's threatening his family.
I think Hank's idea is that he's not going to be taken seriously without hard proof Walter is Heisenberg. And he also thinks he'll be taken off the case if he hasn't already done all the work. Before he asks for a warrant he wants to know specifically what he'll find with it.
I'm glad they didn't drag out the confrontation just because that's what most TV shows would do and it makes me more excited that Breaking Bad is doing something different. Also I'm not sure they could justify it in character. Hank's not a good enough liar/actor the way Walt is to not tip his hand in front of Walt, and Walt's too sharp not to notice the way Hank is behaving. It would not have made sense for the confrontation not to happen.