The statement that 700c is faster than 650 is open to being challenged, as this has been hotly debated over the years, apples to apples comparisons being rare. A larger diameter wheel would make for a smoother ride, as it has a longer contact patch and doesn't conform as well to small holes in the road. And this may be more efficient. The main difference in efficiency is likely to be in the air resistance, and here the smaller wheels tend to have wider rims and wider tires, thereby hitting more wind.

For me it's enough that there are two common sizes out there (700c and 26") and I'm willing to live with a ridiculously long head tube (I get used to it). Because some smaller bikes really need the smaller rim size (599) I could live with that being the only one available, if that meant an increase in the range of choices in tire. I'd love it if I had a few dozen tires to choose from, all in an appropriate BSD and width, with good flat resistance, and reasonable longevity, and I could narrow down the choice based on such things as price and traction behaviour. As it is, by the time I get past the "must-have" criteria: BSD, width, flat resistance, I'm looking at a handful of tires, and often if I'm not looking online, I may have it narrowed down to one by that point. And it may well be a compromise width or not-very-flat resistant.