5.7x28mm, as
Justin pointed out, has similar velocities as a .22 mag rifle, out of a pistol. It is centerfire, meaning more reliable ignition. And finally, it is a bottlenecked cartridge, meanining superior feeding and extraction reliability.
That said, Kel-Tec is coming out with the
PMR-30, a .22WMR handgun which holds 30 rounds in a flush-fitting magazine, which is likely intended as a direct (and cheaper) competitor to the FN Five-seveN pistol.
edit; if the PMR-30 takes off, I foresee some ammo manufacturers selling .22WMR loads tailored to the short barrel of a pistol to close the gap a bit.