DragonLord, I think what you're missing is that the people who would determine which system a FFVII remake goes to wouldn't be doing it because they think the game 'deserves' a remake. It seems beyond obvious that a Wii/DS/PSP remake would sell many more copies and cost much less than would a PS3/360 remake. Around half of all FF sales come from Japan, after all.
Yes, it's pretty clear that a very traditional RPG can be done better (prettier) on the 360/PS3 than on the Wii, DS, or PSP, but that's not really Square Enix's chief concern, and I don't see why that's at all relevant to the discussion.
Also, it's somewhat misleading to imply that a Wii remake wouldn't be an upgrade. A DS remake might be little more than a straight port, but the Wii is just a little bit more capable than the PS1. It can certainly do better than FFX or FFXII, and even those are much more technically impressive than FFVII.
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