There is a way to direct network traffic over USB if you are hooked up and using ADB on the host. I made it work so,e time ago for a project, but don't recall the details off-hand.
Look around in some of the other forums for other Android devices, it isn't specific to the Nexus 7 at all. You will see a lot of threads about trying to tether a PC to a phone over USB, to use the cellular network, but there are some discussions about using it in reverse too.
I managed to tether through wi-fi and bluetooth. Try using a CM7 RCA rom, or something off of here if you like. The built in features for 2.3 and up are great for tethering over wi-fi. Just make sure the rom supports it now since Im using CM10 and for right now wi-fi tethering does not work. Best of luck to you.
CM10 supports tethering, however WPA/WPA2 tethering was broken on devices with bcmdhd wifi until I fixed it earlier this week. Some devices may not have the fix enabled yet (It has to be enabled on a per-device basis, since the "fix" will break devices that don't need it.)
If you have a device that doesn't have the fix yet, try setting the security to "Open" until your device has the fix pulled in.
The future certainly looks like it is full of wearables. … more
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