As part of an application I was asked to supply seven (7) years of tax returns or if not total returns at least W-2 froms. Is this legal?

it is not necessarily illegal, but is unusual.  I would not provide the tax returns as this involves a lot of private information they have no business nor need to know about.  You can provide copies of the W-2 statements over that period.  you can block out your Social Security #.