I have no idea what the other shop charged..... For all I know I was less $$$.

In this particular case, it wouldn't have taken any longer, and shouldn't have cost a penny extra to cut the seats to the proper diameter, instead of cutting the seat smaller than what was done originally, and consequently sinking the valve.
In fact, it would have taken less time because the seat would have cleaned up with less actual cutting time.

A lot of times if I'm freshening a set of heads that I did originally, and the seats aren't pounded out, I'll just give them a light bump with a fine stone to refinish the sealing surface.
This is usually the best way to ensure the least amount of material is being removed from the seat.
Which way the seats get refinished(machining or grinding) is basically a judgement call made after evaluating the condition of the heads.