What does that really mean, "1 year of experience 7 times"? The candidate has the memory of a goldfish and literally relearns their skills every year? I think you're undervaluing experience in general.
Generally it means that the person being discussed hasn't spent those years acquiring skills that are specifically useful to the interviewer. So the years spent acquiring different skills don't count.
The intent is probably to say that the interviewee has spent 7 continuous years doing a job that can be done as easily by a person with one year of experience as someone with more, and therefore does not provide the necessary challenges to stimulate development in the employee. But again, it is still summarily dismissing actual experience just because it didn't happen in the right place, and is a variant of "not invented here" syndrome.
The people who say things like that should likely not be discussing "years of experience" at all, as their focus seems to be on breadth and depth of skillsets. The "seven years of experience" guy likely knows how to do X, Y, and Z, while the "one year of experience 7 times" guy likely only knows how to do X. In that case, talk about X, Y, and Z, instead of T.
There are people that either via the jobs they choose or the long tenure at a company haven't built a strong case that they can tackle anything other then a small domain of problems.
I had an interview once who had 15 years of managing scientific data (he wrote a parser then changed it when the data set had format changes a few times a year) that parser and platform remained unchanged for 15 years and he had no other duty.
Another interviewee had only built WordPress sites for 4 years. He had no other projects (hobby or professional) to illustrate he could do more.
I see your point regarding a skill set that is maybe just not useful to the interviewer, certainly in 7 years there should be more. People can and do spend time working on very narrow problems though.
Time is a limited resource, and it belongs to the individual. You can't reasonably expect that someone will spend it making themselves more valuable to you when you aren't paying them, or even holding out a reasonable prospect of paying them in the future. By happy coincidence, there are plenty of people out there that will make themselves more valuable to 10000 interviewers just like you, by acquiring skills that seem to be popular or becoming popular, but there are many more that won't live their lives for other people on the off chance that it might be rewarded someday.
You can't really measure skills by how long someone has done something. Some people can learn a new skill and be better at it after two weeks than someone who has done it for ten years. And there are also people who can practice a skill for ten years and be 100000 times better at it than the guy who just learned it two weeks ago. To make those judgments, you have to be able to measure aptitude, rather than just read timespans off a resume.
And right there, with the WordPress guy, you're implying that he wasted 4 years of his time because he didn't spend any of it preemptively learning any of the things you find valuable. Why should he? He hadn't even met you yet. How long had your job posting been open, declaiming that your company would need someone with M years of experience in skill X when it starts hiring for that in N years? (Yes, I know that's not how it works.) Did you even try to gauge how skilled he was able to become at WordPress site development after four years? Did you wonder why it took him 4 long years of doing just that before wanting to move on to something else? Or did you preemptively strike him off your list for having no prior "years of experience" in skill X?
My point is that I would very much prefer it if the industry hired for general aptitude rather than specific skills. If that doesn't happen, I would still prefer it if interviewing companies used a different metric for measuring the skills they find valuable than the total time spent practicing them. The glib comparison between "N years of experience" and "1 year of experience, N times" just presses all of my rage buttons at once. It almost perfectly highlights the gross disrespect that potential employers have towards job-seekers whom they perceive as unfit to serve them. It is part of the arrogance that prevents companies from critically examining their own hiring processes.
Adding features to the average business CRUD app on a LAMP stack for seven years straight is a lot different than applying your skills and energy to things like distributed systems, bigger scale projects, learning better abstractions and design patterns, etc.