This can't explain it all. I never played the remake, but I am playing original FF7 with modern mods (chiefly New Threat 2.0 [0], on top of 7th Heaven [1] and FFNx [2]; but also graphical mods like SYW which enhances textures with AI, a GUI mod called ESUI, among other things) and it's an awesome experience. Note that those mods are entirely free and made by passionate fans.
I fully believe that a FF7 remake made by fans and for fans would be 10/10 even with a fraction of AAA production values.
(Now, what you can say is that 90s JRPGs are an acquired taste and modern audiences aren't accustomed with stuff like tons of random encounters. Indeed I feel that many classic JRPGs are nigh unplayable due to this issue alone, even though I grew with them. However this is addressed by mods like New Threat so I'm sure that a proper, fan-made remake could also address this and other QoL issues)
[0] https://forums.qhimm.com/index.php?topic=14938 (in general FF7 modding is mostly discussed in this forum; there's a "Documentation" link that discusses all changes but it's a full rebalance that changes item placement, the script of bosses, etc. It also contains QoL improvements)
This can't explain it all. I never played the remake, but I am playing original FF7 with modern mods (chiefly New Threat 2.0 [0], on top of 7th Heaven [1] and FFNx [2]; but also graphical mods like SYW which enhances textures with AI, a GUI mod called ESUI, among other things) and it's an awesome experience. Note that those mods are entirely free and made by passionate fans.
I fully believe that a FF7 remake made by fans and for fans would be 10/10 even with a fraction of AAA production values.
(Now, what you can say is that 90s JRPGs are an acquired taste and modern audiences aren't accustomed with stuff like tons of random encounters. Indeed I feel that many classic JRPGs are nigh unplayable due to this issue alone, even though I grew with them. However this is addressed by mods like New Threat so I'm sure that a proper, fan-made remake could also address this and other QoL issues)
[0] https://forums.qhimm.com/index.php?topic=14938 (in general FF7 modding is mostly discussed in this forum; there's a "Documentation" link that discusses all changes but it's a full rebalance that changes item placement, the script of bosses, etc. It also contains QoL improvements)
[1] https://github.com/tsunamods-codes/7th-Heaven (it's like a package manager for mods, there's another called reunion and many but not all mods are available on both)
[2] https://github.com/julianxhokaxhiu/FFNx (it's a modding framework for FF7 and FF8, some but not all mods depend on it)