Updating Final Fantasy VII to have more modern 3D character models and environments seems like an expensive venture, simply because they can't upscale the game's archaic, 3D assets in a way that they can with a seventh generation game like Final Fantasy X. Additionally, recreating modernized assets for FF VII is probably more costly than replacing 2D sprites and background art for many of the 2D FF remakes.
Furthermore, let's say that Square-Enix decides to upgrade the visuals closer to Advent Children, would they still leave the game voiceless (which would probably come at odds with the improved visuals), or would they add voice work? If the latter, than SE would have to rewrite the script, because the original lines simply would not work in a modern, voiced game, which is a whole undertaking as well.
Beyond all this is the likely event that some of the very same fans asking for a remake will be displeased with what Square-Enix changes to the game. If SE doesn't change visuals enough, fans will call the remake "half-assed", but change the visuals too much and then "they've destroyed what made the original so great". Would all of the quirky aspects of Final Fantasy VII remain in the remake, like the whole Don Corneo portion?
In my opinion, the original game is fine as it is (I just replayed the game last year when it released on Steam), so I would prefer that SE saved itself the trouble of having to worry about the eventual crying of how they ruined Final Fantasy VII, and instead, spend their resources on getting more than one single-player main entry (i.e., XV and XVI) out this console generation.
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