I like to think that the reaction to the FFVII remake was so good that Square made a Decision to go all-in on development after the reception of the first announcement; the original plan being to make a remake similar in quality to the FF 3 one for DS, done by some small unknown studio, relatively low budget. There have been bits here and there indicating more senior staff being assigned and more hiring being done for the project IIRC.
Three years probably also means they basically threw away or redid anything we've been shown in that first announcement video, too - I'd consider that a tech demo at this point.