I don't exactly know what your link is saying in relation to your statement, but focus on this quote from the following article
"In 1974 the FTC instituted a ruling requiring audio power and distortion ratings for home audio equipment to be measured in a defined manner with power stated in RMS terms."
Here's the article:
http://nobleamps.com/measuringpower.html
Basically, before this ruling, watts ratings was the wild west. Any manufacturer could use whatever method they chose for stating their amp's power rating They could use RMS, peak, PMPO or whatever else they chose. This means that a lot of advertised watts were well let's just say "overinflated".
The FTC ruling in 1974 specified what method b used to get power ratings to keep everyone on a level playing field. A lot of 100 watt amps were now 20 watts. Is this what you're referring to?
But, as for that 7 watts sounding remarkably loud, most speakers use only a watt or two to play at room filling levels on music. It's only when played painfully loud that more are needed on a steady basis. It's the musical peaks that demand the extra watts. Of course, speaker sensitivity has a lot to do with this.
as for loudness and watts, it's not as simple as it seems. Three decibel change in loudness is barely noticeable. To achieve a three decibel change in loudness requires twice the power. An apparent doubling of loudness requires ten times the power. Here's a link to help explain it
.
http://www.gcaudio.com/resources/howtos/voltageloudness.html
Finally, those watts on speakers are the maximum power they can safely handle on a continuous basis. it has no bearing on how loud they play or how good/bad they sound.