I am no expert on weapons by any means, but here are some considerations I quickly found online: M1A1 was only semi-automatic. The later M2 variant was select fire, and from what I see its rate of fire was 750-800.
With this in mind, the OW version of the M1 is pretty much an M2 carbine. If 750-800 is the RoF that the OW mod sets it at, it is probably historically accurate in this context. I would like confirmation on what the M1 in xiow servers is set at for RPM.
According to the WaW wiki, the M1A1 does 40-30 damage in MP. Here are some other guns in context. These numbers are from the wiki.
STG44: 30-20 at 535rpm
PPSH41: 22-14 at 1250rpm
MP40: 40-29 at 535rpm
Thompson 40-20 at 735rpm
Type 100 40-20 at 750rpm
MG42: 30 at 937rpm
Browning: M1919 40 at 625rpm
FG42: 30-22 at 937rpm
Type99: 45-33 at 625rpm
DP28 45-35 at 469rpm
BAR 45-35 at 375rpm
Interpret these numbers as you'd like. What I see is the M1 is a weapon with the mobility between an SMG and LMG, but the damage and range of an LMG that shoots like an SMG. (To be fair the STG is pretty similar, yet weaker)
I don't know if these numbers help or hurt my argument but for some reason the gun does get used a lot. Personally, I think the MP40 silenced and the gewehr silenced are the best guns in the game, so I guess I should be fine with people liking the M1 more! I even like the STG over the M1 I think.
One final consideration: We are talking about weapons in a hardcore server; most guns kill in one bullet anyway. So this is all probably a moot point. Interesting nonetheless. It definitely shows that the M1 could probably kill faster than any other full auto gun if player health was not set to half or whatever it is.