At $500, they're probably just taking a shot in the dark and guessing five hours of somebody's time at $100/hr. Basically, they probably don't want to deal with you, and they're hoping either you'll go away, or that if they have to deal with you, they'll be making good money.
I'm no leather expert, but half that stuff looks it will work its way out once it's warmed and massaged a little to take the stresses out. The little dimples, for instance... Get that in the sun or use a hair dryer on a warm setting, use some leather conditioner, and I bet it'll be mostly gone.
The bolsters that are a wrinkled and "tired"... I think that has more to do with the foam being broken down. It's squished, has lost some of its body, and so the leather is left not as tight as it once was.
Check out this video that Larry from AmmoNYC did on cleaning and restoring leather, particularly the steaming part.
https://www.youtube.com/watch?v=4Bd_IqK5ydU
You probably can't tell because the seats are black, but that leather is probably dirty on top of all the other defects.
Here's another video he did with some leather guys on rebuilding a seat... Particularly the part on rejuvenating the foam at 3:24..
https://www.youtube.com/watch?v=EUhrar9lR5Q
Food for thought.
Cheers,
SC