Is the index fund an S&P 500 fund? Is it also the lowest-cost fund other than money-market? Go with that.
Your 401K is not forever - once you leave this employer, and you certainly will someday, you can roll this over to and IRA and get whatever investments you want.
A 401K has to be truly awful to outweigh the tax benefits for most people. Even more so if there is a company match. Truly awful, in my opinion, means roughly >2% annual fees, all in, or even front-load mutual funds. So don't cut your nose off to spite your face - continue investing and lobbying for better options at the same time.
Exception: You don't have the intention of maxing all of your tax-advantaged space. Then you could do this: 401K to get match, then max IRA (traditional or Roth depending on eligibility and your take on taxes now vs taxes when you're drawing), then more to the 401K until you're done investing for the year.