And what Quark says is literally true here: pretty much everything has been taken away from these people.
As SFDebris pointed out in his reviews, why not set the phasers on wide setting during the fight?
Because it consumes too much energy, and these poor sods have too little left? For the same reason, the guns aren't set to "make the enemy disappear" but only to "make the internal organs of the enemy disappear"...
Or mass produce the TR-116 rifles.
But these people can't produce anything.
Whether the standard sights of the standard rifles can do that or not is a question that goes unanswered specifically because there is no need to see through solid matter in the episode.
A sight that could see through Jem'Hadar cloaks might be useful. But those cloaks are supposedly psychic anyway, so technology wouldn't make much of a difference.
If you have a bullet transporter, you can leave the rifle home. Just transport the bullet into the enemy - or a bullet-sized bit of the enemy heart into your pocket. Which may be exactly what a phaser beam does.
In a cave siege this would be invaluable to the Starfleet officers and non-coms.
The actual fight was out in the open, though.
And finally those nifty phaser proof barrels we see Blaze of Glory, that the Jem'Hadar couldn't shoot through. Chuck/SFDebris pointed out if he was a Starfleet Engineer, he'd try to make body armor out of the stuff.
Even random decorative paintings at SFHQ are phaser-proof (see "Conspiracy").
Which is amazingly logical and consistent. When phasers hit a target at full strength, the vaporizing effect propagates in the victim but stops when it hits the victim/air or victim/floor phase border. It seems the beam can be tuned to vaporize flesh and flesh-like materials, in which case it doesn't vaporize air or steel - or to vaporize steel, in which case it doesn't vaporize flesh (as seen in ST6 when Valeris wants to make a point).
Sure, the fighting in "AR-558" was dumbed down as much as the writers dared, to make it relatable to the audiences. But it's still pretty much within the limits of what's plausible for TNG technology, once you figure in the fact that these folks are stranded and starved of resources.
Timo Saloniemi