In speaking with Joystiq, Final Fantasy producer, Yoshinori Kitase, said that while he would love to do an HD version of Final Fantasy 7, the work load would be more than the entire Final Fantasy 13 trilogy.

Keeping in mind that the trilogy of Final Fantasy 13 games took over 10 years to develop and release and you should have a better idea of how big of a task it would be to remake Final Fantasy 7 with modern visuals and high definition audio.
"I still think it's going to be a very challenging task," Kitase said, before reiterating that remastering the PS2 games was a big enough challenge, and that the gap between today's tech and the PS1 is a lot wider.

"I can tell you personally I would love to do it," he said. "But before I decide to do anything of that kind, I would have to bring my dedication and motivation levels to the maximal high. It's not the kind of project I can start casually working on, it's a really serious project. It would be nice if I got the opportunity to do that in the future, but at the moment no plans."

So, nearly a decade on: Any regrets over showing that PS3 tech demo?

"No regrets as such," Kitase laughed. "It was the right thing to do at the time. But look, if we look at the possibility of remaking Final Fantasy 7 for high definition consoles, we already took nearly ten years to make the trilogy of Final Fantasy 13 games, ending with Lightning Returns. I think that a high-definition FF7 would be definitely comparable to that scale, an even bigger project maybe. It would probably take a lot longer than ten years, even if we ever do it. So that's what I am saying, I would have to have a complete and utter dedication to the project."

That is to say, don't keep holding your breath for there being a remake of Final Fantasy 7.