Great idea, lets make it easer to wage war with no loss....
With no human loss on “our” side it makes it easy for the masses to ignore the war....
Defense contractors will make millions in our forever war.

I agree with ErstO. they help to save our troops lives, but they can also be used in so many other ways to deter people. Guns are not always about shooting the bullets.
20 of these on an Oil tanker in the Gulf would soon 'deter' pirates from going any where near the ship.
Also, it's given me some great ideas for my next 'Slick Moaner' novel.

Possibly a lot safer for civilians than bigger drones, more of a surgical strike weapon. Provided fire control is still under human control its not much more of a threat to civilians than conventional weapons. Danger is if the next logical development takes place and that's localised AI.
After all the easy counter to these weapons is a low cost RF jammer and the counter to that is onboard AI.

I'm a little puzzled by the rifle mounted on the drone. In full auto it would be out of ammo in less than two seconds(so not really a machine gun). There would be no point in carrying the extra weight of the hand grip and sights. To be effective it needs more ammo and to be stripped of any unnecessary weight plus be able to fire accurately on the move. This could be a very effective anti-sniper weapon but can it withstand enemy fire or is it just a big clay pigeon? With night or thermal vision it could be even more useful.

So how long before we see the next terrorist attack is with gun mounted drones in a city somewhere

Seriously? We come up with drones that take the most magnificent photography, among other positive uses but then ... how long does it take to start weaponizing it? Not long at all. So disappointed. ErstO - I couldn't agree more!

Effective counter-weapon - Radio Jamming. Who cares about being FCC complaint when you've got a flying machine gun coming your way.

Clad the thing is very light but effective armor. Set it up to run with 3d classes like a racing drone, add in advanced AI and navigation, give it a good, light weapon, maybe a laser? If it has 8 rotors, it should be able to limp out on 6 or 7 so shooting it down will be hard. Give it a communications system that is hardened against interference.
Now you have a very good sniper weapon! The next version with be stealthed, quiet, faster with better armor and more range and a satellite uplink. Wait a minute, don't we already have this? UAVs.

This concept will be a life saver for soldiers to be sure. Now how about getting law enforcement and SWAT up to speed to protect citizens from this threat? Because if I am seeing this proof-of-concept right now, it means some fiend has already thought of it for terrorizing civilians in cities.

Good, and inevitable, idea. But I strongly disagree with Doug about armoring it. Military vehicles are armored, not so much to actually increase their survival rate---the increase isn't worth the extra expense---but 1. to protect valuable, trained human operators, and 2. to give the crew a (false?) sense of invulnerability, making them bolder in action. Neither reason applies to a drone. It is much more cost- and firepower-effective to make several cheap, expendable ones for the price of one heavy, expensive armored drone. Think Zerg rush. And their best defense is maneuverability, anyway.