definitely shop around, if you are bringing the trans to the shop out of the car & not using expensive race parts a rebuild should be half that price or less. & as mentioned a quality rebuild with stock type parts should be able to handle 500hp on the street or some light drag racing if not using slicks. i have a friend thats a long time GM mechanic that will rebuild most trans for $300-$500 in labor & a good rebuild kit isnt that expensive. im in the midwest though & prices around here for engine/trans work seem to be a LOT less than other places in the country based on some of the prices ive seen mentioned.
can also consider a pre built unit from places like TCI or B&M or any of the other trans companies out there. i run a TCI street fighter th400 behind a 500+hp 467 & have done lots of low 11sec runs & its holding up great (knock on wood). the converter can be pricey depending on what you want/need. TCI states the street fighter can handle 700+ HP & you get a complete trans with no core charge for under $2000.
https://www.jegs.com/i/TCI/890/21139...SABEgJ9qPD_BwE