While I would agree that the age, wear and tear on the C1s reduced their accuracy as compared to brand-spankin'-new C7s (at the time), my overall impression is that the reduction in recoil was the single greatest attribute of the 5.56mm. In the manly sport of service rifle shooting, people rarely admit to the recoil factor, but, in my experience, it makes a significant difference.
I found the design of the C1 amplified recoil. In theory, it should have been fairly mild considering its weight, but since a fair number of pounds of steel could be found in the piston, bolt and bolt carrier, it put a pounding on a shooter that was sleeping in tent for a week in hot 'n humid July in Ottawa, out in sun all day competing (CFSAC) for 4 or 5 days in a row; the recoil adds to the fatigue factor. I saw this a lot later on shooting ATA trap whereby a lot of the old timers used release triggers to fight the flinch when shooting a 12 gauge 300-500 times a day. As an aside, I found that my M-14 and Garand didn't kick as much as the C1 did (and yes, the setting of the gas regulator plays a big part in this).
Reflecting on the majority of recruits coming into the CF, most were/are from urban environments where they had never shot a gun. To go from zero to C7 for them is a much easier transition than zero to C1, IMHO. This is why I think the C7 is the CF's greatest, quantitative and comprehensive advance in a service rifle.