I joined DVC after the switch to 7-day booking. However, I can't imagine having to call every day to add an additional day to my trip if it goes back to the old way. What a pain that must have been!
For example, I will hit the 11 month mark while at WDW (the 2nd day of my trip.) I will be calling on the 2nd day of my vacation at 9am to book that next trip. I would be really annoyed if I had to call every single day (for the length of my current vacation) in order to book the next vacation under the old system.
I agree that walking a reservation is a fairly large loophole. Not sure how Disney can eliminate this without causing additional problems.
Calling day to day was a pain and was becoming very frequent, even for non-busy times. It was very much being pushed by many as being the only way to book your reservation. People on the west coast felt they were being treated unfairly because of the time differences and how they had to wake up at crazy hours to call right at 9 am, etc.
In fact there were far more posts back then of people not being able to get through at 9 am to book their stay and all the rooms being gone when they did call. It was quite a mess then, much more than now IMHO.
As for the loophole, it has been brought to DVC's attention this loophole, especially right after it was implemented. There is a simple rule that could eliminate walking which was suggested, that was basically not to allow any changes to a reservation for 10-14 days after booking, this would prevent anyone from walking, but really wouldn't affect 99% of owners who are not trying to walk their reservation. DVC chose not implement any rules to prevent walking, probably to appease people that felt they "needed" an advantage, etc.
Again, just my opinion, but I think walking reservations has caused more problems than it has solved. People that walk reservations tie up rooms that they don't need, sometimes preventing someone who is not "walking" their reservation to not get the room they do need. That person is discouraged because they couldn't book and sometimes won't waitlist or will change their dates hoping to get the room....
As far as fairness, I feel that it is pretty fair that guests who arrive first should be able to pick their room and keep that reservations intact. With the day by day bookings, there were a lot more piecemeal reservations out there. So in the OP's situation, they might have gotten Concierge on day 1 and 2, missed day 3 and 4 and got day 5. What ended up happening was there were waitlist for the missing dates from multiple people and it was more or less a stalemate on waitlist.