Do I need to replace my Resmed S7?

You probably avoided a lot of headaches and hassle buying your own.
While a lot of people still think that insurance will just up and automatically will supply a new machine after 5 years it's actually becoming the exception rather than the rule.
More and more insurance companies are adding in "if it can't be repaired" and won't pay for a new machine just because it's been 5 years. They want the machine broken and it costs more to repair it than it is worth before they will pay for a new machine.
Medicare is already doing this.....cost cutting thing. And what Medicare does eventually the other insurance companies end up doing if not doing it already.

Not to mention some DMEs and docs are coming up with their own rules like new sleep studies and all that stuff.

I told my DME that my old machine was "getting noisy".
They never asked to look at it, and Medicare took their word for it.
Remember, generally, noise that interferes with sleep or failure to report data,
can qualify as "not working properly," at least in a 5-year plus machine.
My old machine would run--just not perfectly--and who knows for how long.
Many mechanical problems are intermittent, and impossible to confirm.
The DME wants to sell a new unit, and they are not ready to check every iffy device.
Of course, Medicaid or Medicare Advantage may place costs above your life,
and deny for any flimsy excuse they can find--or invent.