Why 7 days? Because
DVC said so.
I honestly don't mean to be flippant. Disney sets the rules, and that's what they decided to make it. Years back, they made a change from basing the booking date on check-out date to check-in date. When they did that, they gave it a 7-day limit.
If you're calling later in the booking window, you can book as many nights as you like. However, on the very first date of booking, you can only book 7 nights. The next day, you can call back and add the 8th night, and repeat that until you have all 10 days.
Actually, there is a reason behind the limit. I just can't tell you why they picked 7 days instead of 10 or 14 or some other number. The reason for the limit is so people with a large number of points don't get an advantage over everyone else for obtaining hard-to-get bookings. For example, if there was no limit to how many nights you could book and you had a very large number of points, you could book a stay of 30 days. You could later cancel the first 21 days and effectively have booked your one-week vacation three weeks ahead of anyone else.