Handscraping adds to the price of materials.

The small size of the job also adds to the price.

The contractor may just not want the job (too busy, too far away, doesn't like you or your SO for some weird reason) and so is just trying to scare you away with a high price.

It probably depends on how competitive your market is and whether good people are looking for work. Without details like type, cut and grade of wood, what's required for preparation and installation, and what type of finish, it's impossible to say. I can say it would be calculated by the hour, not by the square foot.

Small jobs cost as much as big jobs. Everything has to be mobilized and set up the same for a 200 sq ft floor as a 2000 sf floor. You might want to take the opportunity to explore replacing all the rest of the floors, as a 2" handscraped is very odd duck material. And that's probably why it's a premium for it too. You might could replace a whole lot more with something more readily available for not that much more money.

Replacing all gets you 7-11" wide engineered planks. A lot more wood structure and beauty is what you'll see. And that's a main reason new construction doesn't use solid 2-1/2" strips anymore. Light European Oak is widely available.

Hakwood, duchateau, Monarch Plank, Hurst Hardwoods and many more have it.

Thanks for the comments. It makes sense that it's a premium for a small job. I definitely don't want to replace more because my wood floor is very nice and there's a lot of it, so I guess paying a premium for a small job is what I need to do.

I would call around and get a few more bids - then you will know if the bid you have is in the range of what you should be paying. I know handscraping adds more $ - but that seems like a really high premium for it.