If memory serves 223 made it's big advances in being designed for shooting humans AND not killing them, 2 more to pack them away. I'm sure they will kill a deer, hell a 22 will kill a deer and many other things, possibly not the best for the purpose.
No, and that's a myth that needs to die. It started back with the original adoption of the cartridge and M16 platform, and the politics around it. Robert McNamara was one of the new breed of Washington Technocrat "whiz kids", and deeply data driven. He loved his stats. One of the things that Remington did right, was that they did extensive research on the terminal performance of the cartridge, and presented the research to McNamara and the DoD. Among the many pages of research, was a section detailing the "Wounding Profiles" of the cartridge. It listed wound channels, cavities, etc. The point was to show just how lethal the cartridge was.
McNamara was not very popular with a lot of the old school Washington Wonks and political Generals. They deliberately misused the language of the reports to make it appear that the cartridge was only going to wound enemies that you would much prefer were just dead. There was a lot of push-back against the M16 and 5.56 cartridge, because both were developed outside the government arsenal system, so there was a whole bureaucracy and thousands of government jobs at risk if the precedent was set for small arms development entirely by private enterprise or outside the arsenal system in general - "Not Invented Here" is how the US ended up with the .308 (7.62 NATO) instead of any number of better cartridges being developed in Europe, and the M-14 instead of the FAL (the FAL was, is, and always will be, a better military rifle than the M-14 could ever hope to be).
Anyway, the military had no interest in a cartridge that just "wounds" - and still doesn't. It would actually put them in a legal grey area they don't want to be in, in terms of both The Hague and the Geneva conventions.
Also, even though the military 5.56 ammo is designed to be lethal, it's still a FMJ round, designed to remain intact and not expand upon contact. That's a very different beast from .223 hunting projectiles, which are designed to either shatter (frangible), or expand (soft point), and dump energy in an entirely different way.
Now... Having said all that...
I still wouldn't shoot anything bigger than a coyote with .223 Remington. That's more of a personal preference/bias than anything. I
will, and have, hunted deer with 7.62x39, and found it to be more than acceptable at reasonable ranges (I don't flatland hunt deer, just bush, so I'm not shooting much past 50-75 yards). Realistically, by the numbers, .223 should be just as effective at those ranges so long as you're using a 65-75 grain soft point. But that skinny little bullet gives me the willies. I want something with a bit more mass and diameter.