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It sounds fishy, but hard to say whether you are being ripped off or not. What I can say is that a quick google search turned up lots of complaints about iyogi. Maybe that’s just the nature of that type of business, or maybe it’s iyogi specifically, I don’t know. It seems like a lot of money to pay though. Anyway, there is an old saying that misery loves company, so maybe this will make you feel a little better (or worse). http://iyogi-complaints.com/
The system requirements for Windows 8 aren’t all that much different from Windows 7, though. 1Ghz or faster processor, 1 or 2 GB of RAM for 32bit/64bit respectively, 16-20 GB of disk space, and a Direct X9 graphics card should get you in the door.