That's a fair price. I charge $275 labor plus all parts and fluids. I won't do a set without at least changing the inner pinion bearing, crush collar, pinion seal and pinion nut. Most of them I also change the outer pinion bearing, axle seals, bearing races and the carrier bearings.
*Edit* If it is going to take him 6 to 8 hours to change the gears than he is not very good at doing them. Anyone that knows ring and pinion install on an 8.8 should be able to do it in 4 hours tops, that is replacing all the bearings as well.