That's a little harsh. The codec might not be great, but the C300 makes a lot of huge advancements over the 7d in areas that matter more: a reduction in aliasing, vastly superior low light, better latitude, almost no skew, etc. Footage straight out of the C300 looks fantastic.
The codec does lag behind pretty seriously, though. I've heard claims that the F3 with s-log is useable even in XDCAM, but I doubt it. Never had much luck grading material from 8 bit MPEG-based codecs. 8 bit 4:2:2 is not enough space to capture a flat image and retain tonality when grading. More disappointing, the uncompressed output on the C300 is apparently only 8 bit, putting it a step behind the F3 in that respect.
The C300 looks great for documentaries, tv series, etc. so for anyone who's considering between it and film for that--I can see it as a viable alternative. But I agree that it's not competitive with the Alexa and Red for theatrical exhibition, just based on specs alone.
That said, it's almost certainly good enough that lighting, cinematography, and direction become the primary issue with it--good enough that anyone who knows what they're doing can get a solid product. Even with the 7d you had to watch out for skew an aliasing to the point it was frustrating shooting anything with camera moves or detailed fabric. The codec isn't holding you back THAT far and if it is, just rent an Alexa already. If you're talented and successful enough that the difference between an 8-bit and 12-bit codec is holding your craft back substantially (i.e. you're shooting for theatrical release), you can afford to rent a $50,000 camera instead of a $20,000 one.