Wayne,
On good fitting flat bar bikes, the saddle is usually 5cms or so higher than the handlebars. This allows you to get the right arm reach to the handlebars and the right leg reach to the pedals.
Arm reach - Arms should be nearly straight, with an ever so slight bend in the elbow to act as a shock absorber. This stops various shoulder/upper body muscles from cramping.
Leg reach - at the bottom of the pedal stroke, your leg should be nearly straight. There should be a small bend at the inner knee level.
Taking the above into account, with most modern bike designs, this means that your feet will not touch the floor easily (tip toes perhaps).
Tundra is saying that if the picture is the actual setting that your ride at, then either:
Your saddle is too low, your handlebars too high, your bike too big or your body has unusual dimensions (i.e. leg vs arm lengths).
If you're 6 ' 7" and your ride like that, then your legs must be very short and your upper body very long.