The SLR / L1A1 was / is a very good semi automatic Assault rifle. In fact any FN FAL is good news and fun to shoot Just not on Automatic.
To understand the whole 7.62 x 51 and 5.56 debate you need to go back to the 1950's. The British and Americans had just fought the Korean War with small arms that dated from ww2 if you were in an infantry section in the British army in the early 1950's you likely had a bolt action rifle in the form of the .303 No4 or No5 if you were stationed is SE Asia and a section LMG in the form or the Bren in .303
If you think about it at the end of ww2 the germans had lead the way with small arms thinking with the introduction of the MP44 and the intermediate 7.92 x 33 Kurtz round.
Basically with a section of infantry you wanted a lot of fire power a Late war German infanty section equipped with Mp44's and a Mg 42 had a lot more fire power than a British infantry section in 1950 in Korea with Bolt action .303's and a Bren.
The problem with fire power is it consumes a lot of ammunition and full powered rounds like 30-06 and .303 are a pig to shoot fully automatic, were thought to be overpowered for combat ranges that had been experienced in Korea and lattely in ww2, and were heavy to carry if you lugged a lot of rounds.
So the British developed the .280 round and a rifle to fire in in the form of the EM2
http://en.wikipedia.org/wiki/EM-2
Our American cousins put the Kybosh on this as they had developed the 7.62x51 and a rifle to shoot it ( which became the M14) this lead to NATO standardising the 7.62x51 and the British army adopting the FAL which had been rechambered by FN to accept the now standard NATO round. However any fully automatic rifle in 7.62x51 is bad news M14 or FAL so the British Army dropped the Automatic Feature and also converted the design to be produced on Imperial tooling ( which is why you get Metric and Imperial FAL's.) It also converted the Bren over to 7.62 x 51 and we got the LMG and procured the superlative GPMG and converted the old No4 over to 7.62 x 51 to give us the L42 (and Enfield Enforcer).
The American's ( and Kiwi's and Aussies using SLR's) got embroiled in Vietnam and the Americans found that a full sized M14 had issues in Jungles and swamps.
1. The Ammo was heavy to lug around in large quantities if your choping through it on Semi and Full Auto.
2. The Walnut Stocks of the M14 tended to Warp ( so much so they issued a fibreglass stock for the Rifle).
3. It was a big rifle and not best suited to Local troops like the South Vietnamese.
The above lead after bit of a protracted period to the adoption of the Ar15/ M16 and the .223 / 5.56 round by the US Military.
Eugene Stoners AR 15 was revolutonary combining aerospace technology in the form of Light weight Alloy castings a very ergonomic design and the ability to fire semi controlably on Automatic. The 5.56 mm round is a lot lighter than the 7.62 x 51 so you can carry more ammunition for the same weight. The rifle was a lot lighter than the M14 and suited smaller statured troops such as the South Vietnamese.
So with the Americans now using 5.56 it soon became a standardised NATO round. With most NATO countries converting over by the late 80's.
The SLR was a good issue rifle for it's time.
) An interesting, but hardly viable, reasoning I heard for the caliber switch was that a 5.56 would take 2 people out if the fight. 1 injured and 1 to help him to safety. The 7.62 would just decimate, and they would just leave the casualty due to no hope. Interesting, but wrong. As per SLR vs SA80, its horses for courses really is it not? I prefer the look of the G36 police use though 
