'Why would I want the .7 mag over teh 1.0 mag?'
With everything else being equal, 'in general' and off the top of my head, the viewfinder magnification affects:
Rangefinder precision - the higher the magnification, the higher the precision.
Minimum equivalent focal length of viewfinder field of view - the lower the magnification, the wider the field of view. A 1x might be able to show framelines for a 35 mm lens while a 0.7x may be able to show them for a 28 mm lens.
Brightness - the lower the magnification the brighter the image, but this is usually barely noticeable and it is affected by other factors.
Ability to use both eyes - with a 1x magnification you can keep both eyes open, and you see the brightline frame 'floating' in space. With other magnifications it is still possible to keep both eyes open (a lot of us do), but it takes a little getting used to, and it doesn't look so perfect.
'my 2.8 is much brighter than a 50mm 2.8 on an SLR..'
That's a new one on me. How are you measuring or judging 'brightness'? There may be a tiny difference because of the slightly higher light transmission of a simple lens compared to a lens with more glass and more air-glass surfaces, but one is unlikely to be 'much brighter' than the other.