Yes, unfortunately it is true of nearly all factory repair centers. It's seemed to me over the last 14 years of full time RV'ing that manufacturers don't want to bother with RV'ers or their little problems so ask outrageous amounts for very little work.
I once got a formal quote on replacing the master cylinder on my Class A with Frightliner chassis at one of their shops and they came up with $2800 minimum firm. Ended up doing it myself...not an expert but it only took me 3 hours. Saved $2,200.
There are shops around the country that repair Onan equipment more economically. Power Systems West in the Northwest region comes to mind. I used them for my Onan 7500 Watt genset when the front bearing ground itself to dust. Cost me $660. They are a chain and I suppose it would be up to each shop to decide if they want to work on RV generators though. That's a more specialized field requiring a different skill set just to get the dang thing out of the RV frame, or working on it inside that framework.
I don't use mine much anyway (like most RV'ers) and if it dies, before I decide what to do about it, I'd certainly get a good grip on the symptoms in order to get a quote from 3-4 places and then decide whether it's cheaper to have it repaired at a competitors shop rather than a factory shop, pull the whole thing out and repair it myself (could require some heavy equipment like a big hydraulic tranni cart and a place to work with tools), pull it out and take it to a shop which would save labor costs, buy a new one from Harbor Freight (low cost but does need a bigger better muffler and probably an accessible gas tank installation so some redesign needed), or
do nothing at all.
Whatever you decide, they do have value to the next owner so it might be best to hang onto the one designed for the space in your RV's frame. As small as your unit is, it might be fairly easy to remove it yourself.
Also, if you have a shop in mind to work on it, check them out on
RVServiceReviews first.