Again, its not about .223. .223 Remington is NOT specifically prohibited. All rifle calibers less than .243/6mm are. As well as any ammunition with less than the required muzzle energy or bullet weight. And as TFOGGER mentioned, the regulation reflected a belief at the time about bullet construction.
Colorado regulations do not distinguish between mule deer and whitetail deer except for a handful of tags on the plains.
Wyoming only allowed .223 Remington for antelope a couple of years ago and I believe just this year allowed it for deer, lion and grey wolf for the first time. They still require larger caliber for elk, bear etc.