I would say it went both ways. Seven was a fantastic character but the show focused too much on her once she was brought on. I would rather have seen equal character development, and not just specific characters getting all the attention. Granted, it depends on the potential of the stories with the characters, but the writers could have done more to develop the other characters like Harry and Chakotay.
What I like about the earlier seasons is that the amount of character stories are fairly spread out, and I wish that they had kept a similar dynamic in the later seasons.
While I agree with you totally in retrospect, I think while the show was in production the decline in viewership gave those in charge the impression that we didn't care about the other characters or their development. If the audience enjoyed the development of the other characters, then why were we turning away? When Seven joined the cast, many tuned back in for a while. So it seemed logical to them to continue to focus on the character that was putting butts back into the seats.