Interestingly, the SM57 and SM7 share very much.
The SM7 adds a humbucking coil to reduce noise, and a larger air volume behind the Unidyne III moving coil element (which both mics share) to extend low-frequency response a little.
And of course the grille is further away from the element, meaning that you can't position it as close to the source as you can an SM57.
As far as I know, that's it. They DO sound different, don't get me wrong. But very much in the same "family" to me.
I was never quite able to relate to the manner in which the old TapeOp/indie/DIYcrowd love to tout the the SM7, and love to hate the SM57. They're almost the same thing! The SM7 was basically designed to be an "improved" SM57 for more demanding broadcast applications, and the two perform very similarly. To me it always defied logic a little, or at least seemed mighty hyperbolic-- like if I were to say a MIM telecaster barely qualified as a guitar, but that an American Standard telecaster were my favorite. Maybe there's something I'm missing!
I think the SM7 is pretty cool. I think the SM57 is pretty cool. They're actually kind of similar. I could understand liking the SM7 a little bit more for some stuff, since it's basically an "improved" SM57. I also personally prefer a good SM57 for some things, like placing right up on the grille of a Marshall cabinet in tandem with an MD421.
I guess to me, even if the capsule is the same for the SM57 and SM7 (and I have never been 100% sure it really is identical, because the replacement cartridge assembly is different for each mic), there are important differences. One mic is transformer coupled and the other isn't, the capsules are implemented differently, and the cases are radically different... that adds up to a substantial distinction in my mind. It actually goes slightly against my own set of preconceived notions to prefer the SM7, because most of the time I prefer "audio things" with transformers.
Also there are plenty of Indie/DIY folks who are all about the SM57, aren't there?
Anyway, I'm not saying the 57 is no good - I just don't usually love it when I compare it to other options for a given application, but of course people use 57s to make records that I DO love, all day long. There are many paths to good sound.