LO,
You are quite right that any gun has limitations, but these can be alleviated nowadays. Also quite right that an air to ground gun is normally depressed below the line of flight (or you do as the Russians do and mount them in a pod and angle them downwards for the strafing run). Air to air guns are commonly mounted slightly elevated.
However, with modern flight controls it's now possible to do a much better job of hitting the target, if you go for an Integrated Fire and Flight Control (IFFC) system. Trialled by the USAF in the 70s, and fielded by the Swedes in the Viggen, so I was told. You can use EOTS as well as radar to give you a really good ballistic solution, with the IFFC handling a lot of the workload. Add that to clever flight controls that can adjust the angle of the fuselage for you and you can get some impressive Pk figures. You can certainly fire further out than 1km with a 27mm round, depending on how accurate you need to be.
As ever, it's the requirements - what do you want to do to what, at what range, under what conditions?
I saw the through life cost arguments made for the Gatling on the JSF - and the use of an existing round was a big factor. But that argument relied on not using the 27mm rounds already available and NATO cleared - unfortunately, the US gun and ammo firms were able to convince the F-35 team that the 27mm round 'would be a problem'. You are quite correct that they are now looking for a better 25mm round, a move that was entirely predictable 10 years ago. Actually, there is already one, the 25mm MultiPurpose (MP) round developed by Raufoss and licence built in the US. Equally predictably, using a round not designed in the US is a solution that seems not to find favour.
Best Regards as ever
Engines