firewood
You are incorrect, I just finished an app to run on 7.1 and it was accepted. However, it was built with the 8 sdk, but that wasn't the question or my statement.
7.1 apps can still be submitted and there is a 7.1 simulator on XCode.
Here's my XCode build: Version 6.3.1 (6D1002) and I have the 7.1 , 8.1 and 8.3 sim loaded.
Oh and I had to provide a 7.1 launch screen to make it acceptable.
The real question should be this, why would anyone not want to build from the latest SDK?