Different beasts. The 7D is three years old now, in modern tech terms that's ancient. When the 7D came out, 120fps was not even on anybodies radar as a digital shooting format - except with the Red One, which would've set you back quite a bit more than a 7D.
There's all sorts or things that effect what a camera is or is not capable of, including heat dissipation, sensor read-out speed & refresh rate, sampling method, processing power, buffer size, etc, etc. My guess is that the (relatively) ancient 7D is lacking a lot of what is required to shoot proper 720p at 120fps.
The Hero 3, on the other hand, is brand spanking new and has been developed as a special-purpose tool. Action sports is it's primary market and the guys at GoPro have worked hard to deliver a product that meets the needs of the target market. Of course it comes without all the bells and whistles that even an ancient 7D has, like a large sensor, interchangeable lenses, 18mp RAW stills at 8fps, manual everything, etc, etc.
I can only dream, though, that the next generation DSLR's do have 720p at 120fps. Panasonic have introduced it on several of their cameras, and I'm considering buying a FZ200 for that feature alone. If a Canon 70D or 7DmkII shot nice, clean 720p at 120fps, it would definitely make my RED Scarlet dream redundant, at least until clients starts asking me to shoot 4K.