While I can see that replacing aging M9s is something the military faces and that considering a new handgun at that time makes sense, I don't see how this pistol is really any step forward. Modularity? Please. The M9 had about as much, able to be chambered in the same .357 Sig or .40 S&W cartridges with an upper change just like the M17. Threaded barrels? Yep, can do that on an M9, too (Can even thread the stock barrel, in point of fact!). So, really, the only notable advantage to the M17 is that the grip can be customized. Jury is out on the degree to which individual soldiers will actually be able to do that.......
As well, If you're gonna call it modular, let's make it actually modular, to where any deviation from 9mm NATO could be a substantial step up, as in 10mm, 9x25 Dillon, 9x23, or any other respectable round that won't fit in a 9mm frame. And on that note, since suppressor ready seems to be a part of the criteria, there is but one common service cartridge that really excels there, and it's the good ol' .45 ACP. Pretty much everything else has to be detuned to subsonic velocities. If I'm stuck with ball ammo at <1,050 FPS, I'll take a .451" 230 grain pill over .355" 147 gr. any day.
So, yeah, I think they could have done better.