I don't think he's trying to rip you off, but I do think he's charging you a premium price for the job. $400 for parts is pretty high, and if it's a complete strut/spring/mount kit, it shouldn't take an experienced mechanic more than 30 minutes a side, because it's a bolt-on job.
You're probably going to end up paying $400 any way you approach it. I'd stay away from guys who either charge too much or too little. And sorry everything is breaking all at once, I've had that happen to me, too.
*Edit* I didn't notice your last question, but yeah, leaking struts is kind of like bad shims on brakes, it's not something that's imperative you fix. If your shocks are making noises or bottoming out, that's a whole different issue.