"I stand corrected, Mike. After reading about it a little more, it seems like the desire for standardization with NATO was a greater factor than finding the "perfect" round, and the US had a large part in pushing for the 7.62. I'm sure there was a bit of unwillingness to move too far away from the the 30-06 along with a desire to save money."
The United States was firmly wedded to the .30 caliber, and in a lot of cases, for all of the wrong reasons.
The British, at the same time, were working on the .280 Enfield, which was actually showing quite a bit of promise ballistically, as was the prototype rifle, the EM 1 and EM 2 rifles. The EM 2 was a bullpup design, which later resurfaced in the SA80 rifle design.
The French were also working on a number of cartridge designs, as were the Belgians.
At NATO discussions and equipment trials, the United States made it very clear that we wouldn't accept anything less than a .30 caliber round, all in the name of common interoperability.
So, with the United States paying the lion's share of defense money for most of the NATO allies at that time, everyone knuckled under and adopted the 7.62. Except for the French. They stuck largely with the 7.5x54 (and in some units the .30-06), until they adopted the 5.56 FAMAS in the 1970s.
A decade later, when the United States suddenly adopted the 5.56, a lot of our NATO allies were either financially unable or politically unwilling to go through the process of adopting new firearms.
The British went to war in the Falklands with the FN-designed LAR.
Germany didn't drop the 7.62 as the primary rifle round until 1997 with the adoption of the G36.