I don’t know why you would do 7 on 7 football if you weren’t looking to play at the next level. That seems to be the motivation for that. You can do everything else you need for football development without doing AAU 7 on 7. Not saying AAU basketball or any other traveling sports isn’t viable. At least you are playing the actual game of softball, volleyball, basketball, etc. in other AAU sports. Football 7 on 7 is not actual football like another poster said.
I think kids looking for schollies would prioritize 11 man tackle, but that is a minority. And some of them would do both if they could. Other kids (and/or their parents) would prefer 7 on 7 because they think it is more fun and safer. If it was offered I could only see it only growing in popularity. Some kids might even develop enough in 7 man that they go out for 11 man and/or play more. Especially lower levels. Some kids don't mature that way (mentally or physically) till 7-8-9th grade.
Just playing devil's advocate.