Depending on what iOS 8 is pushing out and introducing to the table, I'd say that we can't rule out the iPad 2 just yet as if they make the iPad 2 a legacy device, they'll have to do the same for the iPad Mini, which just turned a year old not too long ago.
Assuming the introduction of iOS 8 is like that of iOS 6 with respect to iOS 5 in that there's not much aside from a slight API difference, I'd say the iPad 2 and the Mini would still have another year or two of support before it's considered for legacy status.
iOS 7, as Col has already stated, has it's share of issues just like all the iOS in history. Whether to upgrade or not is entirely up to you. See if you can fiddle around with someone else's iOS device on iOS 7 to see if you like what you see before restoring, or you can head to an Apple Store and try it out. You can ask for a staff member to give you a walk through on iOS 7, and they can show you the comparison between the new and old iOS.
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