At first I thought the AR was underpowered too, it actually feels pretty useless, then I realized it is 100% meant to be used as a short range weapon(even the manual says it), which is kind of a departure from usual game standards, especially if you are used to sniping across maps with AR's in MW2. But yeah, use it when you are about 15 feet away from people and as long as 90% of the bullets connect they should be dead before the clip is empty, sorted.
The DMR is you mid to long range weapon, its actually quite a demon and should be your weapon on choice. So no, I don't think Reach is unbalanced at all. All they need to fix is that weird one hit kill melee thing some people seem to be able to do, thats annoying as fuck.