How Close is 'Close Combat'?
And do we still need to do it?
As a young infantry officer I was trained that my job was the focused application of violence in order to impose my will on the enemy. That would involve a number of things, including, ultimately, the prospect of close combat - including the use of the bayonet if necessary. I was taught this because ultimately in order to impose my will on the enemy, the enemy needed to feel that I was better than him and that I could, man for man, beat him. It might not be a fair fight, but it would be a fairish fight. It was was about moral superiority not in the sense of the justness of the cause, but moral superiority in that there was no wriggle room to escape the fact that one had been beaten.
History often shows that when the other side does not feel itself beaten then it comes back again (the Germans were defeated in WW1, but did not feel that they had been beaten in the field for instance). The Afghans have never felt themselves bested.
The western way of war now appears, certainly from the reports I hear from Afghanistan, to be risk averse, casualty intolerant and reliant on firepower - often of the PGM type. We no longer seem to be willing or able to get close to the enemy.
If accordingly the enemy feels that man for man he is stronger, braver and better then us - can we ever hope to win?
So, how close is 'close combat' nowadays and how important is that we should get closer?
Close Combat is What We Do
I think you muddle the tactical/operational and strategic levels (or at least don't differentiate between the aspect of 'war' and 'warfare'). Tactically/operationally our Soldiers are engaged in close combat. I think what you are highlighting is the inherent problem with a conflict in which one side is engaging in limited war and the other in total war. We are tools of policy and that policy will dictate to what extent violence is applied. There are a myriad of reasons why ISAF are engaging in limited war, but I would not have any reservation in stating that US forces are both willing and able to unleash violence of action if called upon to do so (you may have a different vantage from the UK). Nor should we abandon the necessity of close combat as it would be our ultimate undoing as a military profession and 'managers of violence.'
My War is Harder Than Yours
It seems the to be the nature of soldiers to make their war the "tough one." Their combat was somehow...closer.
I've done three GWOT tours, all in the shooting arena. I have never had to pull my knife other than to peel an apple, I had a grenade but failed to use it, and the nearest I came to my enemies during a fire fight was perhaps 20 meters (although I did spend a good portion of 556 ammo).
My father was a fighter pilot in WWII and Korea and all his work was in CAS. He always joked that the only enemy fighter he ever saw during the war was in movies. His brother was killed in Italy, an infantry officer in the 36th Division, whose body was never found.
Their father, my grandfather, lost a leg in France in 1918 about ten days before the war ended...and so the family story goes.
According to my grandfather his wound was from artillery, the same weapon that took his youngest son. My grandfather had been in France less then six months, my uncle in Italy less than four. My father was in the South Pacific for roughly 14 months but admits to plenty of liberty. He also said strafing in Korea, he was off the coast there for seven months, was scary and he came back with plenty of holes in his craft but never a scratch. I got knocked around with a few IEDs but got away with little more than a headache, oh and I once got a nasty sunburn. All told, I have spent 30 months in a combat zone (roughly the total of all my relatives combined combat experience) and expect I will have to go one more time before I retire. If we could all get together the debate over whose war was toughest would be a riot.
Still, looking across this almost 92 year spectrum of a family at war it strikes me that close combat is far more rare than we think. Surely it happens and when it does it is intense and dirty but I imagine the "time in contact" numbers aren't as intense as we want to imagine. The reality is that we, and our enemies, prefer to kill from a decent range. We like aircraft, missiles and smart bombs and they like command detonated IEDs and suicide bombers.
Thus I don't think western powers have shifted away from close combat rather they have never really embraced it. Soldiers in a democracy are expensive and the bill for close combat is too high so naturally we lean toward other means.
Good risk aversion is making your forces unpredictable.
After a fight, if your counts are up and you have time and you have hot shots on the beat, and you have support, it may be a good idea to let them persue the last standing.
Proximity is not an issue.
Mix it up a little and you will find much more deterrence.