Your method counts each surjective function that maps three elements of $Y$ to one element of $X$ three times, once for each way you could designate one of those three elements as the element of $Y$ that maps to that element of $X$.
For example, consider the surjective function $f: Y \to X$ defined by $f(1) = 1$, $f(2) = 2$, $f(3) = 3$, $f(4) = 4$, $f(5) = f(6) = f(7) = 5$. You count this function three times:
\begin{array}{c | c}
\text{designated ordered pairs} & \text{additional ordered pairs}\\ \hline
(1, 1), (2, 2), (3, 3), (4, 4), (5, 5) & (6, 5), (7, 5)\\
(1, 1), (2, 2), (3, 3), (4, 4), (6, 5) & (5, 5), (7, 5)\\
(1, 1), (2, 2), (3, 3), (4, 4), (7, 5) & (5, 5), (6, 5)\\
\end{array}
where we have written $(y, x)$ if $f(y) = x$.
You count each surjective function that maps two elements of $Y$ to one element of $X$ and two other elements of $Y$ to a different element of $X$ four times, twice for each pair of elements of $Y$ that map to a single element of $X$.
For example, consider the surjective function $f: Y \to X$ defined by $f(1) = 1$, $f(2) = 2$, $f(3) = 3$, $f(4) = f(6) = 4$, $f(5) = f(7) = 7$. You count this function four times:
\begin{array}{c | c}
\text{designated ordered pairs} & \text{additional ordered pairs}\\ \hline
(1, 1), (2, 2), (3, 3), (4, 4), (5, 5) & (6, 4), (7, 5)\\
(1, 1), (2, 2), (3, 3), (6, 4), (5, 5) & (4, 4), (7, 5)\\
(1, 1), (2, 2), (3, 3), (4, 4), (7, 5) & (6, 4), (5, 5)\\
(1, 1), (2, 2), (3, 3), (6, 4), (7, 5) & (4, 4), (5, 5)\\
\end{array}
Let's correct your count.
Surjective functions in which exactly three elements of $Y$ map to a single element of $X$: Choose which three of the seven elements of $Y$ map to a single element of $X$. Choose that element of $X$. Since the function is surjective, the remaining four elements must map to distinct elements from the remaining four elements of $X$. The number of such functions is
$$\binom{7}{3}\binom{5}{1}4!$$
Surjective functions in which exactly two elements of $Y$ map to a single element of $X$ and exactly two other elements of $Y$ map to a different element of $X$: Choose which two of the five elements of $X$ are each the images of two elements of $Y$. Choose which two of the seven elements of $Y$ map to the smaller of these elements of $X$. Choose which two of the remaining five elements of $Y$ map to the larger of these elements of $X$. Since the function is surjective, the remaining three elements of $Y$ must map to distinct elements from the remaining three elements of $X$. The number of such functions is
$$\binom{5}{2}\binom{7}{2}\binom{5}{2}3!$$
Total: Since the two cases above are mutually exclusive and exhaustive, the number of surjective functions from $Y$ to $X$ is
$$\binom{7}{3}\binom{5}{1}4! + \binom{5}{2}\binom{7}{2}\binom{5}{2}3!$$