[Drifter]

Under the armor piercing ammunition "cop killer" law, iron bullets would only be illegal if designed for a pistol. Just about any rifle round will penetrate soft body armor so they are exempt from 18 USC 921(a)(17).

So you can legally make soft iron rifle rounds. You probably wouldn't want to because iron is not as dense as lead and other common bullet materials. Lightweight bullets have higher initial velocities, but shed that velocity quickly due to aerodynamic drag. Rifle rounds are generally intended to shoot targets far away and a lightweight bullet that had shed a lot of it's speed won't carry as much energy as a heavier bullet with a slower initial velocity.

You also have the problem that the rate of twist of the rifling works well on only a small range of bullet weights. Too light or too heavy and the rifling won't stabilize the round as much - think of a football thrown with subpar spiraling - which hurts both accuracy & precision. An old 30.06 rifle will probably best shoot 175gr bullets, but if you're in a lead-free state your probably shooting 165gr copper bullets. That's pretty close, but still people notice a decline in accuracy. And copper is much more dense than iron. You can't just keep making the bullet longer - at some point it will no longer fit in magazines/chambers or leave enough room for powder.

You can overcome this by designing the rifle from the beginning to shoot lead free ammunition, in which case iron's biggest downside is that it would have to go much faster to maintain the same energy at a given distance. And shooting bullets faster wears out the rifling quicker. Lighter bullets are also affected more by winds.

Could you then design both a new rifle and new ammunition - an iron round that was much longer than normal for lead and a rifle that would chamber it? Probably. I bet that would work. Could you get enough people to adopt it to become commercially viable?