Having a major transmission overhaul is so expensive anyway, people
probably feel they're getting ripped off when they're writing the check
no matter if it's legit or not.
My local (reputable) transmission shop, which a guy started from the
ground up and built it into a large, state-of-the-art facility employing
probably 20-30 people, charged about $1800 for R & R of a Chrysler 604.
That's a pretty fair amount of cash.
But I WOULD be interested to see a breakdown of that bill--i.e. how
much the actual hard parts cost (which they buy in quantity), and then
labor, (which they're likely very proficient at).
So it could very well be that there's $300-400 in parts and just a few
hours labor and people willingly pay upwards of $1800 for the service,
all day every day.
There is, however, a lot of overhead and expensive (specialized)
equipment, i.e. two dynos, torque converter reconditioning machine(s),
huge inventory of parts, training, office & bookkeeping, paying &
retaining QUALITY people to oversee the operation, not to mention
dealing with all the used fluid and parts, etc.