Unless I'm shooting on a tripod, I leave IS on my 17-55 turned on. I never get any blurring like you describe at higher shutter speeds.
Unlike you I'm only using a 10MP sensor behind that lens, so I'm not able to examine what the lens resolves in such detail. Having said that, the 7D only has 33% extra horizontal and vertical resolution, so I wouldn't have thought it makes blur I can't see that much more noticeable.
Have you got any example shots showing the problem?