My wife asked me if I would be upset if she went out to lunch with a girlfriend of her's (that she used to work with) and two males from this prior job. The thing is my wife used to have a "crush" on one of these guys. My wife asked me if this would be inappropriate and considered cheating and I told her that I do think it is very inappropriate and could be classified as infidelity. She has not worked at this old job for at least 7 years. Am I wrong?

Whether you're wrong or not, she asked you if it you thought it inappropriate and you said yes, then she should not go.
If she told you she is going out with girl and two guys, she's not doing it behind your back, so technically it isn't cheating. However I do think it is inappropriate for her to go out on a more or less couples lunch that includes someone she use to have a crush on.
I'm wondering why her friend even suggested such a thing.

Just going out to lunch is not cheating. But since she asked for your opinion and you gave your honest answer, she should respect your answer. Go out to lunch with the women but not the two males. If she would persist in going, why not go with her? Or would that look like you do not trust her to behave herself? From your question, you have a nagging doubt of that.

What would be wrong is not giving an honest answer, to her question. You did, but your answer begs another question, are you insecure, or not trust your wife?? Co workers having lunch is not cheating. For whatever reason you are uncomfortable, is a subject for discussions between you two. That she asked you first is very commendable.