When you attempt to open a V7 file in V8 or CE MicroStation, there is a pop-up window that gives instructions on how to change your settings to "Allow V7 dgn file open". It would be helpful if a button was added to this pop up to allow this settings change without having to open the file read only or another V8 file to make the change.
Another fix would be to automatically enable "Allow V7 dgn file open" by default after installation. The only workaround is to open a V8 file, but the only way to find a V8 file is to try to open files until one opens.