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Yes for a simple reason: we need to make sure the culture is preserved and for L8 the margin of error in terms of cultural fit must be 0. Only way is be promoted from L7. Of course there might be exceptions but only for very high profile and specialised roles.
All L8 in my org are external. 5 at least. Industry verticals need external knowledge.
Also what TC are you looking for? L7 is quite high, depending on role 300-400K.
L7s can have total comp in 700s; 500s common. L8 850-1M
Definitely find out what it would be before you get too worried. L8 - it's true that Amazon wants to make sure you know Amazon before you take on that level of responsibility.