There are quite a few problems with Gjallarhorn. 1) Rocket launchers are safe weapons. You go out of cover, shoot, then hide again. It's not like a machine gun in that you have to be exposed the entire time you are doing damage. Sure, you can blow yourself up with them but that doesn't really happen that often. 2) Rocket launchers are more versatile with regards to cover. You don't have to just step in and out of cover, you can jump in and out of it as well. That's something that really doesn't work that well with machine guns so you can be limited in the types of cover you can use. 3) Rocket launchers have perks that make it easy to use. With tracking and/or grenade and horseshoes (and Gjally has both) rocket launchers are so easy to use compare to machines. 4) Despite how good rocket launchers are compared to machine guns, Gjallarhorn is by far the best of the rocket launchers and also happens to be of a widely used element. At the very least Gjally should have been void (and make Truth solar or arc) to decrease its usefulness even a tiny bit. So typically the advantage of machine guns over rocket launchers is the sustained damage. But with Gjally doing so much damage, that really isn't as much the case. And with the way boss fights are designed, you generally want burst damage in favour of sustained damage anyways. If Bungie wants us to use machine guns, then it has to offer some really great utility so that we are willing to forfeit the advantages of rocket launchers, let alone the very best one. A good perk for an exotic machine gun is the ability to regen ammo (but only in PvE). That would be something that might compel me to use it over Gjally.

I think the whole rocket launcher issue could be fixed as far PvE goes by giving some bosses the ability to interrupt it's tacking or, better yet, have the Rocket target the original shooter. I agree with you though in that rocket launchers in general are more effective than HMG's.

They could gives HMGs a significant damage buff for PvE, something like 20% to start.

Only if it was only to "enemies of darkness". Otherwise the high impact low fire HMG would murder in crucible. Put 20 to 30% would be good, depending on the rate of fire

They would just do it similar to how shotguns were treated.