1) Colt 6920 is a proven weapon.
2) If you follow proper procedures, you can build yourself a great AR. The advantage if done right is being able to pick and choose the feature you want on your rifle. If done wrong, you've spent a lot of money on ....
3) There are many milspec grade guns out there. Like Daniel Defense, BCM, Noveske, Larue, etc. etc. There are so many options now it's endless.
There are a lot of positives and negatives about a piston system. Some positives are easier cleaning (I don't clean mine) & more reliable (in theory). The main disadvantage is that they are a little less accurate & parts are a little tougher to replace.
For $1000, I'd stick with a solid factory gun like mentioned above so you have a solid chassis to build on in the future.