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Not a web developer, although if your site was untouched for years and depending on the pages licenses (add ons etc etc), everything being said is highly likely.
WordPress updates every so often, it can break old plug ins and so forth.. this is possibly why they wanted to create a sub domain and back up the site just in case something broke – sometimes it does in this situation..
Overall, i dont think they are asking an arm and a leg – and if you sourced the web builder from reputation, hopefully this would carry merit to their advice as well…
All in all, you may find someone cheaper to go in and do it… although i feel this is reasonable IMO.. would love to read up on some other web gurus advice..
Also, might pay to ask what licenses are being renewed and do they need re-registration every 12 months etc etc or lifetime – aka ongoing fees…