When you have time to take aim and choose your targets, it is because they are farther away and you have the time to do so, that is when you want one bullet to do as much work as possible. The fact that there is less energy being applied to the target per round is offset by the fact that more rounds will land on target.
When your fighting a bunch of people close up, you want to spray as many bullets into the crowd as you can to cut down as many enemies as possible in as short amount of time as possible, and a machine gun is ideal for that. I will ignore ballistics and physics and kinetic energy here. Lets look at this from a practical standpoint.
