Extending steer tube threads is a time consuming job, done properly, contrary to what some posters in this thread would have you believe. If anyone is cranking out 2" of threads on a thin wall tube like a steer tube in less than 5 minutes, they are doing a lot of damage to their die, and most likely cutting a very poor quality thread. The reason is heat build up. Even when flooded with cutting fluid, a thin wall tube will heat very rapidly when cut. This heat causes expansion, which causes the die to cut too deeply into the tube. Hastily cut threads are very rough in appearance and function.
I get very clean threads by taking my time, usually setting up a threading job while I'm working on something else. Every 10 minutes or so, I advance the thread about one rotation, one quarter turn at a time. Advance a quarter, back a half turn to break and clear the chips.
This is one job where patience really does pay off.
If your shop took this kind of care, I would say $50 is not that unreasonable. If they did a hack 5 minute job, then yeah, you got ripped off.