I go back and forth on this.
As a parent of younger children who have received trophies for perfect attendance or participating in a sport, it does annoy me that we are essentially saying you still get something even though you finished second, third, last or not being the best. However, in those situations if a trophy keeps the tears away or brings a smile to their face, so be it.
For the little kids, my rationale is that they will be in REAL competitive sports and life (or me) will eventually teach them that losing sucks soon enough and only by working hard and being a team player puts you in a position to win. The important thing is as parents is to make sure that they understand that they finished second (and why) and never to be content with it. Sometimes if 2nd place is your best then that should be recognized and sometimes celebrated.....but never be satisfied with it.
When I look at that 2007 banner, I have 2 memories and emotions...One- Pain. Two- Great memories and moments of that season. I have fond memories of 1985, 1996 and other Patriots teams but that season was just, well..special. The 07 team didn't leave anything on the field. BB pushed that team like no other team he coached. They just didn't make enough plays but there is a lot to appreciate and recognize.
Did Kraft really need to put a banner up there to dignify the 2007 season? I guess not. You can argue Miami and 17-0 or 49ers and Bears also were 18-1 but won SBs. However it does offer a reasonable perspective on how truly special that team was and what they accomplished was something no other team in NFL history had done and came ridiculously close to 19-0.
I guess you can consider the 16-0 banner the equivalent to the 2nd place trophy for U-8 soccer Bob Kraft handed out to the team and fans. Recognize that team because they deserve it, keep the tears away but don't be satisfied with their achievement.