I think that there would be a renaissance in small arms design.
Why? Gun companies spend millions of dollars developing designs, testing them, and producing prototypes.
Would the possibility of having your basic AUTOCAD engineering whiz deciding to build a gun prototype really give us a"renaissance" in small arms design? What do you think would be developed that nobody is trying now? Even without the laws, how many engineers would try their hand at firearms design, especially with so many established designs out there dominating the market (M16 family, 1911 family, Glock line, etc.)? It'd be a significant commitment without a great possibility of financial reward.
Besides, there's nothing stopping these people from designing guns now. It's not against the law to design and build your own firearm. Yes, it has to comply with the NFA and AWB, but people can build their own guns. Ask Correia.
There's just a LOT of established competition in a design field that has reached something of a plateau. It'd take millions of dollars to develop anything significantly better than what's being worked on right now. How many back yard gun designers have the means to do this?
If anybody does have a good idea for a gun, even an NFA-verbotten design, you can still design it and patent it. If you sell the design to a gun company, it might go into production.
But, gun companies don't seem especially interested in new designs these days. Heck, Sig and S&W are now making 1911 type guns, and rumor has it HK is going to as well. Everytime somebody talks about any type of 5.56mm rifle, someone will inevitably chime in that it's no better than an AR-15 clone and that they won't buy it.
I think the main reason you don't see more variety in gun design is because we, as a market, are quite content with what we have and aren't terribly open to new ideas. Espeically since that new guns, without the massive, established production and support network of guns like the AR-15 and 1911 lines, are going to COST MORE.