Anyone in the business of automotive a.c. repair is going to have some fixed costs, due to the need to comply with the various federal and state laws governing the 'capture of freon in your system', checking for leaks before letting you have the car back, etc. Not to mention the costs involved in giving you a guarantee, in the event it quits next week.
Those fixed costs could be the reason the price seems high. I would have to think the lower estimate is the more suspicious one. After all, its not likely you will refuse to pay -some amount- more than the original estimate, in order to be allowed to get your car back.
And an a.c. system can quit working even when the compressor is pumping and the system has some charge in it. It could be a clogged orifice tube, a compressor with a stuck valve, etc.