I am experiencing similar results. After running a web monitor on the main page (default.aspx) the average response time for version 1.6 is 225ms and for version 1.7 it is 950ms (about 75% decrease in performance). About two weeks ago I reported this issue in another thread https://www.nopcommerce.com/boards/t/5109/nopcommerce-v170-released.aspx?p=4
Another member (Slawek) replied to the above thread with further analysis. What he did was turn OFF all caching in both v1.6 and v1.7 and compared them - the resulting response times were similar. This led him to believe (correctly in my opinion) that the problem is NOT in the Entity Frameworks code but rather in the new caching logic used in v1.7
Hope this gets fixed in this version or in the next. Version 1.6's speed is a definite asset, especially in a site with a large number of products.