The in-house studio is interesting because on April 15th, 2004, the Army announced that Ubisoft would take over any future America's Army games. This means that the in-house team might be working less on recruitment games and more on simulation and training as stated above. However, the head of this new office of the Army, Jerry Heneghan, a former West Point grad, Apache pilot, and employee at Red Storm Entertainment (Tom Clancy's studio), has worked on some pretty mainstream games and knows how to make a popular and successful game.
I guess the whole point of it that the Army has found that video games are a great and, relatively low-cost, way to train soldiers, seamen, airmen, marines, coast guard, and Secret Service. Working in conjunction with Ubisoft, Epic (the current maker of America's Army), and creating their own studio says to me that they have some big plans.