Hm, I could've sworn I saw this thing in a TED talk recently. It was flying around the room in their demo.
The SmartBird is a really great tech demo, but ornithopter style flight is not practical in settings like those found in military operations. The extreme weight restrictions, delicate mechanisms, complicated flight, and slow speed make other traditional flight mechanisms far more practical. The small propeller and ailerons are nearly invisible from the ground, and if kept light weight, the sound of the propeller won't be heard over ground noise. There's no reason to use a more complex design.