Not sure exactly what steel you are cutting, but if I run it through G-Wizard, I get 300 rpm spindle and 388 M/min feedrate at the low end of your surface speed range for your inserts.
Since it says you can go to 350 for finishing, that would get you all the way to 1400 rpm, but your 1650 is too fast for that surface speed. Also, to maintain the chipload, you should be feeding much faster at the higher rpm, about 3x faster. By travelling that much more slowly, you're really making the cutter rub.
Chips are probably red hot both because of the 1650, but just as much because they're too small to carry away the heat very well from the cut and because the slow feed is rubbing. I agree you're taking too fine a cut. Try more like 0.25mm depth of cut, 1400 rpm, and at least half the desired feedrate or maybe 800 M/min.
Try G-Wizard for these kinds of calculations. Saves on those transposition problems of Zc vs Zn.
Cheers,
BW
Try G-Wizard Machinist's Calculator for free:
http://www.cnccookbook.com/CCGWizard.html