When the Nexus 7 is plugged in there is a persistent notification that indicates "CONNECT AS / Media Device (MTP)". In this state adb devices
will not show the Nexus, or undoubtedly any other device. Not exactly obvious, but if you select the second option "Camera (PTP)" the device is available for debugging (the lesson is ignore the camera, and focus on the protocol PTP).
This configuration is persistent, and I'm guessing that with a brand new device it will connect as MTP until told otherwise.
Thanks to @Ciaran Gallagher
Settings --> Storage --> Top Left Option (Computer USB Connection) tap--> choose MTP