ARs (& other close tolerance weapons) will see failures with prolonged use of steel case ammo without recurrent cleanings. The reason is, as stated, the tolerances. The close tolerances of the AR serve to create exceptional accuracy potential but lend themselves to less room around the steel case for the dirty gases, eventually leading to a malfunction. With recurrent cleaning, this should be a non-issue. Steel cases do not expand to the degree of brass while combustion takes place. Brass, on the other hand, expands to seal the chamber... preventing excessive amounts of gas from entering. So, it lends itself better to prolonged use in such a weapon as the AR, between cleanings. Accuracy is also another factor between brass and steel. If you're going for what's referred to as "combat accuracy", you will likely get the results desired from both types of ammo. If, however, you're going for maximum accuracy... brass should be your choice. The reasons are the same, chamber sealing under combustion thus reducing the amount of play in the cartridge/bullet during firing. Under normal circumstances, most will see no real difference in accuracy... maybe an inch at 100yrds.
Cheaper, steel case loadings are great for lower cost training and they aren't too shabby at dropping your intended target. At extended distances, one should look to quality, brass loadings. Another thing to think about with most steel case loadings... they usually have a bi-metal jacket and don't lend themselves to impressive expansion or deformation. However, in combat, this is much less of a concern and the penetration advantage of a harder jacket is good for punching through light cover.