This is the comparison I've been using when discussing this with friends.
Midgar is about 5 hours long at most. Stretching it out to a full game would be enormous bloating.
Playing FFVII now, Midgar feels a bit rushed. The bombing mission takes about 30 minutes. Okay, fine. But then as soon as it ends, you're already going on the next bombing mission, just 30 minutes into the game. From meeting Aerith, to the cross dressing detour, getting dumped into the sewers, and arriving at the train graveyard ... Sector 7 is already in danger at 3 hours in. You'll likely see it fall in 3:30, rush to see what came of Aerith, and end up at Shinra's HQ to see the grand conclusion to the Midgar arc at 4:00. It's too fast, and there's no time for these things to breathe. You don't spend nearly enough time in Sector 7 before it's in peril. A single map between Sector 5 and the park before the Wall Market took me no more than maybe five minutes to traverse, only triggering a single battle, because it was so short.
I'm not convinced that Midgar should be stretched to a single game, but it definitely needs to be expanded upon. It could be expanded upon in the original game. It would be nice to have a bit more time to breathe before you're thrown into a second bombing mission. Give the player time to get aquainted with Tifa and Barret before plunging Cloud into Sector 5. Provide a more substantial trek between sectors. Don't force the player to use the same path every time, or allow for a different one through the same area to save time.