i definitely don't think it's crazy to add nice stereo to your kitchen (i added stereo to our bathroom...2ch. receiver + in ceiling speakers), but i would personally save the 7.1 receiver for another room. if you have no use for it anywhere else...go for it, but you can pick up a decent 2ch. receiver for less than $200 and at least not be wasting the extra features and function of that larger receiver.
if you have to place the receiver in the under cabinets, it is not going to be convienient there anymore than in a nearby closet.