Vii deserves a remake just as much as an ff8 or 9 remake.
And no, replaying ff7, you can see the true potential for a remake.
Sorry, but I for one can't. VII is a good game, but I honestly can't see the potential for a remake. Too much would have to be changed to bring it up to modern standards. And doing the sort of thing SE is doing with FFX HD is out of the question, especially since the minimalistic updates barely seem worth it for X as it is. VII would just not translate well from being a pre-rendered isometric RPG to something along the line of XIII-level graphics and over-the-shoulder perspective movement. It would either feel outdated--because it is--and fans would be disappointed that more wasn't done, or SE would do too much trying to make the game fit with modern standards and fans would be disappointed at how much they changed. Trust me, VII is more enjoyable in your memories than it will ever be in a remake. It's a good experience, but a flawed one, and honestly not even the best one in the FF series. The nostalgia it has accrued could never be lived up to.
Getting back on topic, as near as I can tell, SE sees this as some sort of celebration of Final Fantasy...like an in-game cosplay fest. Well, it's not. It's just absurd, now. Maybe when the game comes out I'll be surprised and discover that there's more story there than I expected. But maybe I won't.
EDIT: Hmm well after watching the full E3 show floor demo, at least the battle system looks interesting. The goofy victory pose sure doesn't inspire confidence, though...
EDIT 2: Turns out the pose is just for the E3 demo and not for the final game. Whew.