Stone survived just fine, we've got evidence of stone tools going back over three million years. It preserves much better than iron which rusts to bits in the ground within a few thousand years
The issue is the relative lack of signs of bone injury that is obviously from axes or piercing weapons (as opposed to falls and blunt force trauma). Archaic humans have had hand axes capable of very obvious damage for over a million years, spears for half a million, and they wouldn't have had anything resembling armor until about 200k years ago.
There was certainly competition but if warfare was particularly common, we should have seen more evidence. We probably weren't "peaceful," though, just smart enough to realize that conflict avoidance is usually the optimal strategy.
This also follows the general pattern we observe in the transition from hunter-gatherer to agriculture: The hunter-gatherers weren't really killed until the imperialism of the common era, they were absorbed or just out competed by the agriculturalists. Lots of their remnants survive ranging from the Bedouin to Namibian pastoralists to the jungle dwellers of Papua New Guinea.