I was going to mention TracFone as a good example, actually -- but I looked at their website and saw that they had the "service days" limitation that you mention. IIRC they used to have an even better policy than that, more in line with what I described.
Really? All I know about TracFone policy changes is that service days used to expire so you were forced to buy a card every 3 months instead of stocking up. But they changed that.
Either way it doesn't make sense to charge $0 for a phone to consume resources by having a constant connection to cell phone towers and reserving a number. $7 is pretty cheap so I hope it's a fair price compared to actual costs.