Exactly, Square has better things to do than make a game that still exists and that can still be played. You have to realize that, even though this is very hard to believe, Square has a very successful series on their hands. If FFVII were to be remade, almost no changes would be done to it, save for graphics and voice acting; they'd be wasting millions on just this project, when they could be creating something fresh.
Tell me this, if you had bought a new car a year before and at this present date, it works perfectly and looks good as new, would you buy yet another new car, just for the heck of it? No, because there's no point. The old car works fine. It still does its job. It still looks nice. This is the same mentality Square has. FFVII is still playable and people still enjoy it. I have a friend who makes it a tradition to play it every summer.