How much does Atmos mean to you and how much does convenience mean to you?
If you're watching a 4k UHD or Bluray, the Panasonic player for $150 has a HDMI out which will give you DTS Master HD and Dolby True HD. So you gain nothing there with a new AVR. But you could lose with gaming (although it's compressed to begin with) and with streaming which is more important. I've used a compressed signal in one of my setups and I don't mind it.
Personally, I think you should upgrade but it's a bit tough with regard to the AVR because there are several paths. You could go with DIRAC (Onkyo RZ50) or the new Sony AVRs with Spatial, or just Denon/Marantz Audyssey -> Dirac. You already have Audyssey XT32 so Dirac might be an improvement but Audyssey won't unless you use the app to make adjustments.
First and foremost, you will want an external amp for the 702 S2 so that's $700-$1,000 and you should get that even if you keep the 7008. Re-run Audyssey if you get one.
I would bi-amp the Left and Right. Trust me on that. I do it with my B&W 703 towers (the old ones).
So you need a 4 channel external amp for the Left and Right but I would also add the Center there so I would get a 5 channel.
You have many choices above but I would go toroidal and I would consider the following 2:
Emotiva Basx5 or 7 (almost same price larger toroidal so why not get the A7?) - 95 watts for 5 channels or 90 for 7 (maybe 105-110 for 5)
The BasX A5 is a high quality five channel amplifier that powers the 5 main channels in a surround sound system. Upgrade your amps with Emotiva today!
emotiva.com
The BasX A7 is a great choice if you're looking for a high quality seven channel amplifier to go with a processor in a new 7.1 channel surround sound system, or if you're looking for an easy way to upgrade the amps in your existing surround sound receiver.
emotiva.com
Outlaw Model 7000 (130 watts for 7 - so 140,150 maybe for 5)
LIMITED TIME HOLIDAY PROMO: FREE SHIPPING TO THE 48 STATESVALUE OF OVER $90; TOTAL SAVINGS OVER $140 (WITH INSTANT $50 SAVINGS) Looking for 7 channels of amplification? The Model 7000X stands tall dishing out 7x130W into 8Ω and 7x200W into 4Ω. With both RCA and XLR inputs sporting common mode...
outlawaudio.com
You can also try Class D and see what they sound like - why not? just ship the other one back.