The 2 key statements in this article are "Now they’re buying a 7.62 that has no written requirement document attached to it." AND "... the SEALs are going to be particularly in the hurt locker on this one since the Navy doesn’t buy their guns, SOCOM does. I hear that it was Naval Special Warfare that really pushed this program and that it was the USASOC that basically killed it."

So yeah, absolutely, 7.62 IS better than 5.56, but with no requirements document and no joint support, they're in a mess. They can't use funds allocated for 5.56 Mk-16's to buy 7.62 Mk-17's. That's not the way it works. And based on their FY2011 budget, there's not a lot of extra money to buy Mk-17's.

Either way, as was already pointed out, the warfighter gets screwed. Program managers and contracting officers without a clue making decisions for SOF... AGAIN. A lot of time, effort, and resources went into SCAR, only for them to discover they don't need the 5.56 variant, which accounts for 70%+ of the contract.