In a word, yes. Will it function? It should, so long as there is nothing wrong with your AR15. Some of the lower end AR15's might struggle with it. In fact, I recall at one point, one manufacturer (who will remain unnamed) in particular said something about voiding your warranty if you shot steel cased ammo from your AR15.
If your AR15 will not function with steel cased ammo, there is something wrong.
Shooting steel cased ammo is fine and should not accelerate wear on your AR15.
A while back there was a rumor circling forums about steel cased ammo being really rough on your extractor. I have yet to hear of any verification on this matter. My thoughts and experience tell me that if steel cased ammo is harder on your extractor it is negligible, and extractors are cheap anyways.
I don't really recommend it for self defense type shooting though. Steel cased ammo tends to be less reliable than brass cased. Secondly, most steel cased ammo is not loaded with a great self defense bullet and some brands (like Wolf) are known for not being loaded all too hot.
Steel cased ammo does not create a very good seal and this creates more carbon buildup in the chamber and other areas. This is the reason many steel cased ammo brands are often labeled as "dirty" ammo, not because of the powder. Because of this carbon buildup in the chamber, it is recommended that you clean your weapon in between firing steel cased ammo and brass cased ammo. If you do not, you may increase the chances that your brass cased ammo will get stuck in the chamber.
In short, shooting steel cased ammo will create a dirty weapon faster and can lead to a decrease of reliability.
For training or plinking it is fine and it would probably do fine in a pinch as well but if you are anticipating danger, I would have something else on hand more appropriate for the ocassion.
I don't shoot a lot of steel cased ammo, mostly because it cannot be reloaded, but when I do I prefer (Golden/Silver/Brown) Bear ammo. This ammo is made in the same plant that produces Barnaul (another good option).
The Brown Bear ammo (the cheapest of the 3) shown above is steel cased with a lacquer coating. Silver Bear (a step up over Brown Bear) is coated in Zinc and Golden Bear (a step above Silver Bear) is a brass plated steel casing.
This is an older .223 Silver Bear (zinc coated case) 62gr Soft Point with red sealant (no longer used) around the neck of the case.
Bear appears to be of a higher quality than others in my experience, particularly Wolf, which I will and have used but see as last resort ammo for me. Wolf is too inconsistent and I have had a variety of issues with it in the past in a variety of calibers.
Wolf, which is made in Russia by Tula is a very commonly used steel cased brand of ammo. It used to be lacquer coated but is now polymer coated.
Wolf is known for often having hard primers. Something I have experienced with them several times.
The round on the top is a .223 Wolf polymer coated case. The bottom is a Brown Bear lacquer coated case.
Wolf and Bear ammo are usually labeled as "Bimetal" bullets, and this means lead core with a copper plated steel jacket.
The Lacquer coated stuff began to get a bad reputation at one point and rumors began going around that the lacquer will catch on fire, melt, or get "sticky". None of which are true.
Another steel cased ammo growing in popularity is a line by Hornady that they market as "Practice" ammo. This is the high end of steel cased ammo. There are other options out there as well such as Golden Tiger, which I would throw in the same boat as Barnaul and Bear ammo.