Well as for why they went with a 10mm round I'm guessing that it's the smallest that they could get the bullet and still include all the features they wanted. Plus one gets to the point where adding an explosive element is ineffective. Heck while the MP7A1 looks really cool the round that it fires is not very impressive even if it goes really fast. From what I have heard and having handled the ammo I belive it, it takes between ten and twenty rounds to kill a person. The reason it's so popular with Spooky folks is that it's very quiet with a supressor.
and here is the MP7 in comparison to other firearms.
PS: Sorry about the Image sizes.