Hmmm. You're trying to get your windshield replaced? You talk to the people who replace the glass under the state laws governing the insurance companies and were advised of what the criteria was to get a windshield replaced. I don't see it as a scam any more than any other dealings with insurance companies.
The dollar bill (are you sure they didn't mean dollar coin?) thing must be the local determination of whether to repair or replace. Here in Mass, more than 2 chips in the wipered area of the driver's side warrants replacement regardless of size.
I've done my own chip repair using a UV cured resin. The kits are available at auto parts stores, but the resins are cheap and harder to use. I got some pro grade resin online.