For smooth untextured walls, this is certainly true. Any surface sheen to the paint will display every slight blemish to the wall surface. I am talking about every slight nick and trowel mark that are now invisible under most lighting conditions.

The use of texture eliminates all this. That is why smooth walls are "high end"

Contractor grade flat wall paint makes mediocre walls look good, but the paint won't hold up for long. Wiping down will discolor the surface.

For the $700, and 3,500 sf, it sounds like a good deal to me. Just get it in the change order contract, that the wall smoothness shall be level 5.

I think $700 is a GREAT deal! We are paying almost 5x that for eggshell or satin plus another $2500 for smooth ceilings for 3700 sf!!! It was the one absolute non-negotiable finish for me. I keep telling them that this is the one thing that will make me lose my mind if I walk in and have flat paint or knock-down ceilings. I would get your $700 upgrade in writing and run with it!

We did go ahead and specify eggshell finish. The cost differential is worth it over the long haul. We were able to get smooth finished ceilings in all rooms (even the garage) at no extra charge.