I think +7 could be a tad low. But then again, most of my gaming these days is at epic levels, where LA isn't that much.
You get +5 natural armor, +3 to all saves (partially make up for lost class levels), +34 in bonuses to stats (again partially making up for lost class levels), most of which are the physical combat stats, two bonus feats, one of several special attacks, and a choice of:
+4 to all of your save DCs
Fast Healing 5 (absolutely astonding in a campaign setting)
permanent haste (not as nice under 3.5)
permanent spell-turning !!!
All of those combined are incredibly more powerful than the handful of benefits gained from the half-dragon template.
You could always point out to your DM that the only Core monster from 3E with permanent Haste [Su] ("as if affected by a Haste spell") to be updated to 3.5 - the Choker - instead received Quickness [Su] in the new edition.
Which obviously sets the precedent for how the Monster of Legend ability should behave in 3.5...