"I'm afraid that I would suggest that any child who cannot read by the age of ten is disadvantaged, whether educated at home or in a school."
I agree with most of your arguments but not your conclusion. I think you are disregarding the option of reading to the child extensively, either directly or through audiobooks. This may be even better than reading for oneself: most children's listening comprehension far outstrips their reading comprehension, so they get access to more sophisticated material this way. If an adult is reading to them in person then there are good opportunities to discuss the book.
Second, there is the fact that many "competent" readers do not choose to read for pleasure, perhaps having been put off reading by being pushed too hard. If their love of reading has been switched off, any short-term advantage they may have gained from the vocabulary, grammar and general knowledge they've been forced to acquire will not be of much use to them.
My daughter became a good reader at nine. Before that, having heard many thousands of books, she was excelling in most respects, all except spelling! In the 18 months since she's mastered reading, she has leapt ahead (even the spelling is nearly OK now), because she loves reading and chooses to read often. I don't think she would love reading now if she had not been allowed to come to it in her own time. I think I would have done her a great disservice if I had turned her off reading by pressing her to do it earlier.
You're right that seven isn't ten, so perhaps this isn't relevant to the original discussion. But I think naming any magic age by which a child ought to be reading is a bit dodgy, as it puts fear into parents, and that doesn't help. The fact that schoolchildren rarely become fluent readers late in their school career may be an indication of how strongly they have come to fear and dislike reading through being under pressure to do it. In this sense, there is a "window of opportunity" for learning to read at school: children who don't master it by then are labelled as failing and may give up. But there do seem to be a great many HE children who come to reading a later age with no adverse effects, if they are free of expectations that they ought to be reading earlier.