If we ignore Kuo's prediction there will be three new models this year, it still makes sense there would be a 7S.
A11, True Tone, wireless charging/faster charging. The physical design of iPhone 7S may be older, but why would Apple leave these technologies on the table instead of capitalizing on them? Every major carrier has a no-contract plan and not everyone wants to spend $999 on the ultimate iPhone. Furthermore, there is a huge opportunity for Apple to attach the sale of a high margin wireless charger with a 7S and zero chance of doing that with a 7.