I think we've got to put things in perspective. we punched above our weight in the 70s & 80s, though it was a slightly more level playing field then. We weren't the richest club in the country but in those days footballing prowess still carried more weight. (remember, those were the days of 0,1 & 2 substitutions)
Then in the noughties we again punched above our weight, at least in Europe. Money was talking a lot more now with big squads & high wages hence you know who started to make their finanvial superiority count as did the like of Chelsea. Yet we became statisticalley the no.1 team in Europe reaching 2 CL finals and winning one.
So relative to that this could be seen as a blip. If 7th is as bad as it gets when we're at our low point then many clubs would take that.
Given our stadium size and how much finance matters now, gone are the days wehn we can dominate the league so we shouldn't expect to get there. The best we can dream of at the moment is to compete with the top four and maybe some sunny day in the far distance pip a league title. Strange thing is, we sacked a manager who was doing just that for us.