How much current can an Arduino board supply?

No, certainly not a servo (bad practice to share supply between microcontroller and an inductive load anyway)

The on-board regulator will have to drop 7V, and can't dissipate much power. 300mA @ 7V is 2.1W, much too high, it'll overheat and shoud shut down. Think about an external 7805 with decent heatsinking.