There are a lot of facets to that question, so it‘s a good one. Do you mean from an individual standpoint, or from a cost effectiveness standpoint, a casualty inflicting standpoint, etc.?
Personally, I did my basic with the FN and I couldnt‘ hit a damn thing with it on the range. I‘m 5‘5" and it was too much for me. The C7, with a small butt stock, is much easier for me to control and fire accurately. It‘s also lighter, which I like when I have to march with it.
If I went to war, I would probably not like the plastic parts much, or the stopping power of the bullet, though I could carry more ammo and also feel more confident in my ability to dominate my immediate area with full automatic firepower and a 30 round magazine as opposed to semi-auto with the FN and 20 rounds in the mag.
There is the old question about whether its better to wound or to kill enemy soldiers - for the rifleman, better to kill him dead so he‘s no threat to you. From a logistical stanpoint, every soldier you wound ties up that many more enemy rear area troops to look after him. It‘s not an argument I get involved in myself, but it‘s something some people do consider - and I hear that the 5.56 tumbles more, causing nastier wounds, though the 7.62 is heavier and more likely to kill you than a .223, depending on where it hits you.
There is the question of cost, of interchanability of ammunition with the rest of the section (you could use C1 mags in the C2 LMG, but you can also use C7 mags in the C9).
Another question is whether or not one is inherently more accurate than the other out to certain ranges - and how important is that anyway - how many troops fire their rifles effectively in combat (a question going back to SLA Marshall, who may have gotten many of the answers wrong, but it is a question worth asking even today). If the majority of killing is done with artillery and MG fire (in a conventional war, as WW II was - and as WW II vets found out) then does it really matter? But that raises the question again of how will our infantry be employed in the next 10 years - and who will they be shooting at?
Sorry to drag this out - but there are a lot of other little (good) questions to consider. Personally - from my perspective - I can carry a C7 and shoot it more accurately than I can an FN. I could probably use the rifle butt more effectively too, and the bayonet - the C7 being lighter and smaller - though I‘m not sure which would be more resistant to shattering over an enemy helmet or skull - the plastic or the wood butt.
I‘ve heard a lot of guys say that they prefer the FN simply because it "feels" like a weapon - they like the heft. So despite my own wishes, if the majority of my comrades preferred the FN, I would think their morale would be improved by switching over.
