I have done the obvious -- the USB driver was installed from the latest Android SDK, and USB debugging was turned on in the tablet.
When the Nexus 7 is connecte
I had an HTC One driver installed, and I thought that was the reason for not working. However, it turned out that the reason was I disabled both MTP/PTP.
I did not find the place for the settings, but then I found How to Configure the USB on Your Nexus 7.
It's quite confusing to me, it is in the Storage tab. Either MTP or PTP works for me.