This is an old topic, so I'm going to go against my common sense and respond here.
Not so much for OP's sake, as this appears to be the last post by OP in quite some time, but for anyone else who may have the same ideas.
Square did indeed lose all the 3D Pre-rendered backgrounds (and their original scenes) from FF7 (FF7 did not use Mode 7), however it wasn't 'lost' as in misplaced, they simply deleted them all when moving onto the next project, perhaps not all at the time, but most at least. The Pc version just uses the PSX assets for everything in the game, with some things looking better or worse due to PC monitors having better resolutions, such as the PC sprites having mouths.
VIII and IX did also suffer from this same fate yes. Work was largely deleted, I assume this was due to lack of storage at the time, or just lack of foreplanning.
IX was also made by freelancers largely, and square is particular about who gets to see data from them and who doesn't get to see it.
I'm unsure what this means though
"which caused them to have to recreate every background with sprites for the PC port"
They were textures in the PC version, just like the PSX version, not sprites at all, I'm unsure quite what this means.