I don't believe 7 & 8 are to old for American girl dolls, I have a 7 1/2 year old niece who loves these dolls and and my cousins twins who are also 8 love these dolls. These dolls also have stories that come with them, if anything I think the American girl doll is made for the older girls not the younger ones.
If you live close to down town take a walk down around the American girl store you will see tons of girls between the ages of 5 - 10 or some times a little older with these dolls and if you go into the store this is the age you will find.
I have a 3 year old and she isn't really into these dolls a little big for her yet, my mother thought she needed the Bitty baby which is supposed to be smaller version and she hardly plays with it, I think because the head is so hard and she some times accidently hits herself with it.
I hope this helped some. I say if the 7 & 8 year olds want to play with dolls great lets keep them little girls as long as we can, children these days are growing up way to fast.
mother of 3 year old daughter and planning another.