Well, there is the simple answer: "Because it's their first PS2 game."
If you look at all of the HD Collections and such that have been coming out on PS3 lately, they're all old PS2 games. Re-releasing PS2 games (sometimes in bundles) with graphics updated for the PS3's HD graphical output is a big fad, recently, for whatever reason. As such, if SE is to follow suit, they would *also* re-release a PS2 game.
And, in that case, the only other option would be XII, which would make even less sense. I don't know why everyone is releasing PS2 remasterings lately - it might be a Sony marketing thing - but there it is, that's what they're doing. sweatdrop
Because Final Fantasy X will take far less time to actually redo whereas Final Fantasy VII will take many a year, a lot more money then they can probably afford and Wada has said:
'We'll make a Final Fantasy VII remake once we've made a Final Fantasy game that exceeds the quality of FFVII.'
Wada effectively admitted that the JRPG powerhouse's seven main sequels and dozens of spinoffs have failed to surpass the quality of Final Fantasy VII.
Not to mention Wada also said it would be the end of Final Fantasy franchise if they did remake the game.
Also we are looking at a game that has one disk compared to three, a one disk game will take a far shorter time to place into HD then what a three disk game would and less money and resources being used, this is a smart move for them, I would remake a one disk game as opposed to a three disk game if I can save money and resources.
Actually, the amount of disks has almost nothing to do with it. The reason FF VII has 3 disks is because at the time disk capacity was much lower, so to make a game as large (and at the time detailed) as FF VII they had to use multipule disks. IF they were to remake 7, it would be on a single disk.
The reason they are doing it for X is because it's one of the most popular Final Fantasy games of all time. And remaking FF VII would make it loose something that you can't have with an amount of graphics. It's simply too nostalgic, it would be like if they did a remake of the original star wars. Yes it would look a hell of a lot better, but it would loose that vintage nostalgia that makes people love it so much. In other words, it would be the closest things to a sin you can commit when making a game. Now if they were to compile all 3 parts onto a single disk and do an HD remake like they did with Rachet and Clank, Okami and so many other fondly remembered games, that would be perfectly acceptable.