As of a year ago the 5.7x28 NATO is in fact an official "NATO" round. It was developed in 1986 and arrived on the market in 1990 - 32 years ago.
The victims and survivors of FT. Hood in 2009 would probably take issue with casual dismissal of the round - certainly the three killed while attempting the rush the shooter, and 10 more, most killed with a single torso hit. These were not elderly and children, but military personnel in prime condition.
There is nothing in survivor accounts that suggest the round was anything less than immediately effective in terms of incapacitation, especially when bones, joints, and chest cavity hit.
The ammunition used was OTC SS195LF (27 gr.) and SS197SR (40 gr. Vmax).
The shooter was (had to be) "shot several times" by a responding police officer using a 9mm chambered handgun, before going down.
A single round of 5.7x28 generally weighs around 100 grains, or about 1/2 the weight of a 9mm cartridge. Original spec loadings achieved Mach 2 velocity compared to 9mm at Mach 1.3, and 45 auto at 0.75 Mach.
With a cross-section area of 0.16 in2 the 45 auto has a Penetration factor of 4. With a cross-section area of 0.09 in2, the 9mm has a Pf of 6 and the 5.7 with cross-section of 0.04 in2 has a Pf of 12. With a steel penetrator core, the 5.7 bullet, fired from 10" barrel will penetrate TL3A body armor at 200 yards. While no military grade ammo is specifically allowed on the U.S. market, specialty loaded ammo has demonstrated the ability to penetrate one-side of a Kevlar helmet and the gelatin head inside.
The 5.7x28 was never intended to be a curbside replacement of the 9mm in every possible form of handgun. What it will do is carry more rounds in a lighter package, deliver parity of incapacitation with existing handgun rounds, and deliver superior probability of penetration against not just body armor wearers, but also finding a path through the gear soldiers carry arranged around their torsos - magazines, pouches, flashlights, cell-phones, that might stop a larger, blunt bullet, while the pointed nose, small frontal area, combined with high speed hard core bullet finds a path through.
Having said that, 5.7x28 ammunition should cost no more than $15/box, which it did about three years ago, and the proliferation of gun models chambered to fire it has probably driven prices up even more than all the other social factors acting against guns and ammo. The round is a true joy to load for IF someone would introduce a reliable supply of new brass to the market. RE-loading is more demanding because each case should be "refurbished" to new spec to ensure reliable feeding. Electronic powder scales and dispensers should only be used for factory equivalent and checked against a hard scale at least every 100 rounds.
Curious to see how the ejected brass comes out from the new M&P 5.7x28 with it's gas system versus the locking cam system used in the other three brands.
People living outside of California should be glad they even have the option to turn their nose up at "the latest" handgun offering from S&W or anyone else. And the fight is ongoing in every State.
But you're absolutely right, ammo is too rich for me to take any serious interest in, and certainly not something I could see myself handloading. In spite of that, I'd like to see one of those - just as a matter of curiosity, you know. 
