In an ideal situation, yes the fragmentation should make a larger wound channel. But that isnt what I consider "hitting power". Hitting power is knocking the target down, something that the 5.56mm has never been praised for, prairie dogs excluded. But anyway, considering that the military has been going to shorter barrel lengths (standardizing the M4 carbine) and has switched to M855, fragmentation is going to occur less. And fragmentation is all the 5.56mm has going for it. I have talked to someone recently back from Iraq, and he is highly pissed at the performance of the 5.56mm in combat. You should not have to put five (or more) rounds into the targets chest to put him down. Back when 7.62mm was the standard, if you put five rounds into a man's chest before he went down, it was quite remarkable, even if you hit him at 400+ yards. With 5.56mm it is barely worth mentioning, even if you were shooting at him from under 150 yards.
Everyone wants a reliable weapon in a war zone. Shouldnt your ammo be able to do a reliable job, too?