I'd say it is worth getting.
VIIC can go deeper, and it crash dives faster than the VIIB. Also the VIIC has more options for upgrade, particularly with conning towers.
Which gives you better defence against aircraft, however, aircraft aren't really much of a threat in the out the box game, so you'll have a happier time shooting at them with the VIIC/3 tower fitted.
In the main, VIIC is better.
As for your torpedoes, that sounds very odd, contact detonators never malfunction. I can only think you are perhaps hitting the ship at too extreme and angle?
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I SURVIVED THE FIRST EVER SUBSIM WEREWOLF HUNT - and... I actually won the game for the humans too!
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