This is me uninformed on pricing, but as for a new tailgate, that price sounds about right.
I don't think that's your question though. You wonder if replacing the tailgate is a generally reasonable idea, right?
Again, I'm uninformed, but just shooting in the dark here: they are probably considering how much labor to do. To take off a whole tailgate is probably easier to them than disassembling the tailgate, popping that metal back into place (which, being metal that was already interestingly shaped, is tricky), and then finding some patch paint (if Toyota does that like I remember GM does?). Not to mention that their preference if they were to keep most of your tailgate would probably be to replace the broken part whole, i.e. the entire outer shell of the tailgate, which is basically replacing the tailgate anyway, since I think (more shots in the dark here) that part is not individually packaged..
If you don't mind so much, why do it at all? that dent is not so bad. Or, conversely, you could look into trying to pop the metal back into place and patch painting that spot yourself? A little janky, I know, but definitely less than $1500 cost for parts (and since you're doing labor, free for that).
You could also check a junkyard, although good luck finding a 4th gen (unless somebody totaled theirs), since they last forever..