Square is still full of crap, other games look better than FFXIII and took less time (proportionally) to make. Uncharted 2 for example, arguably still have the best graphics this generation, and it has a town. The is only 10 hours long but they released it in ONE YEAR. So assuming for ease of math that FF7 is four times as large, I see no reason why a capable developer would take more than 5 years to remake FF7. "Capable" being the operative word.
QFT. It's not impossible. Square is just making up reasons to not do it... why it's like this, that's beyond me.