I think there's no "good" answer that works for everyone for when the selection window starts. At one end its "after you enter the park" and at the other its "weeks ahead of time". That 7:00 am time is clearly closer to one end. Whenever the window opens, there's a land rush at that time. There's definitely some guest positives around not having to be in the park first. If they made it 7:00 pm the day before, 12 hours earlier, there would just be a rush then. They could make it something obnoxious, like 3:47 am to spread out the rush some.
Allowing guests to book once they enter the park would actually solve a few of the issues people complain about the most.
1)LL return times wouldn't jump around nearly as much when you are trying to book your first LL
2) It doesn't force your to get up every morning at 7am
3)Rides wouldn't go nearly as fast as they currently do
Disneyland does their G+ this way and it works for them... in fact most "experts" say you shouldn't book your first LL as soon as you get into the park (if there for rope drop) because you will get a space mountain LL for 30 minutes from now when the line will still be short.
Another big issue with FP+ was if you didn't know about it on the first day of your trip... you were basically screwed for the whole trip
At least with G+ if someone shows up and learns about it, they can buy it their second day and have the same chances as everyone else.
Another thing I feel like would really help is to actually take a ton of inventory out of LL
I like that the DLR version of it... its not on every single ride, thus diluting it's value and making it less of a must have. Rides without LL at DLR:
Pirates, Alice, Astro, Casey Jr. Davy Crockett, monorail, railroad, dumbo, Gadget's go coaster, inside out, Jessie's, Jellyfish, jungle cruise, Carousel, Luigi, Mater, Tea, Mark Twain, Mr. Toad, Peter Pan, Pinocchio, Pal Around, Columbia, Silly Symphony, Snow White, Canal Boats, Little Mermaid, Winnie the pooh, Nemo, main street vehicles and Zephyr
All without watching other people use the LL to get ahead of you... this turns it from a must have to a nice to have
Compare that to the ride list at wdw that doesn't use LL
Astro Orbiter, Gran Fiesta Tour, River Boat, main street vehicles, Carousel, Peoplemover, TriceraTop Spin, Carousel of Progress, Wildlife Express Train, and the Railroad
You can have an awesome day at DLR without ever being cut by someone in LL... sure you might miss the headliners, but there is so much you can do that many people opt not to use it there.
Compared with WDW where almost every single line you get in without a LL has people passing you.
WDW has better "value" in that its only $15 for 40 rides vs DLR $20 for 19 rides... but that makes all the difference in how many people are willing to buy it, thus making it actually far more valuable at DLR.