The M114 was like many light vehicles of the era; not given a chance.
The USA seemed to suffer from Tiger Terror much longer than other states. They just hated anything that was what they saw as under-gunned and under-armoured to the point that they flat out cancelled all wheeled vehicle development after The Second World War and the Korean War, both places where they were overmatched in armour.
It was a knee-jerk reaction and it persisted. Arguably it stunted M551 development.
The M114 was designed as a quiet recon vehicle with a small profile, a light weapon and it was supposed to use speed and agility to avoid fights. At this time almost the entire rest of NATO was making wheeled version of this concept (the USA really did like tracks). Recon vehicles do not need big guns and they do not need heavy armour, they need to be small and hard to see and they need to be able to get out of Dodge as fast as possible. M3 Brads are really just going to die in place if they stand and fight.
The M26 cupola mounted on the M114 mounted the standard tankerised/solenoid M2HB HMG and not the standard spade-grip M2 or the under-developed M85. It could also mount the M139 20mm Hispano cannon. Really, nothing is stopping it having an M2/Mk19 mount that was developed later.
It needed a better powerpack and they were available, in fact everything it needed to be rectified was available. They should have resisted hanging more garbage of it, they actually ended up using unarmoured humvees for the role later that were entirely unsuitable*. The comparatively large amount of LAW 72s it carried were meant to be used in extremis but as usual they just had to demand that it be a battlewagon.
Still, it didn't matter in the long run as first helicopter and then drone scouting became the norm.
(*A friend of mine who was junior officer in reconnaissance at this time said 'we show the main force the way by the light of our burning hummers')
