I think FF7 is so popular because it was the first RPG they played
Not to mention that it's also a very very good game.
Here in Europe there was very few RPGs around prior to FF7, and FF7 was even the first FF game to be relased here. Everything changed with the release of FF7. Suddenly, Japanese developers saw a point in releasing their RPGs here, and the game opened so many ppl's eyes to the RPG genre.