Having a car registered is no test of its on-road value, particularly in places where mechanical inspections for registration are not done on an annual basis. If registration really meant something when it comes time to sell then many so-called "barn finds" would be worth a lot less.
Also check out recent Unique Cars magazines. There have been a number of SW20's in recent editions that have been priced well over $7K.
I also feel Redtarga is on to something about the value of SW20's
in good original condition starting to go up in price.
Like seems to have happened with the AW11 (Glass's Guide has had a $1000.00 increase on them in the past 12 months) there will be a tipping point where people realise that SW20's that have been properly looked after and not heavily modified are suddenly getting scarce and values will certainly rise.
Sharon's point about the charity aspect is also very valid, so the $7K paid doesn't seem high at all.