I don't see the Mk8 coming back - it'd be unique to the RN, have no export potential as there's a dearth of Mk8 turrets to convert once the Type 26's are done and dusted.
With a surface combatant fleet of 19, we're past the point where we can afford or justify niche solutions. I totally agree with you in terms of if it needs to be taken out, 155mm beats 127mm but there's other places that money could be usefully put to use - CEC for all the Type 45's for instance, ABM updates for those ships, navalising fireshadow - the list goes on.
Back on AGS, LRAP is about $30K a round and there's no alternative to that guided round as the USN gave up on the idea of shooting anything but that out of the barrel a while ago.So, no smoke, illumination, no cheap warning shot ammo, nothing but LRAP as far as I understand it.
Barrel life is 1,000 rounds vs 7,000 for the OM mount, and the Oto Melaro shoots every 5 inch round ever made - it's a fraction of the cost, and about 80% of the capability.
AGS Lite only carries about 150 rounds per gun, and the installation would involve deleting the forward silos on a flight III Burke - I'd imagine trying to get AGS into a ship about 20% smaller would be a right pigs ear of a job.
We're not actually making a decision right now - the Type 26 is being offered with either the BAE mount or the OM one - and offering up anything other than 127 mm means we have to front the cost of all the integration because I'm sure any export customers won't want anything other than 127mm.