The S7's screen resolution is 1440x2560. So, it's capable of playing back 1440p content. As to you question of "yes, but why watch a 1440p video on your phone": That's not for you or me to decide. This device is capable of 1440p playback and if it's not doing that properly, something is wrong at either end. If you use that mantra, why do any of the things here on XDA? It's a complete waste of time. Your phone works just fine out of the box... see?
Besides, I can see the difference of 1440p and 1080p content on my S7 Edge. I much prefer 1440p.
Hardware video playback acceleration may be the culprit. AFAIK, it hasn't been implemented yet.