AirPods are made of three components: left earbud, right earbud, and charging case. More granular repairs are neither offered nor possible due to glues and so forth, though damaged parts can be recycled for scrap. So repairs can only replace those three parts in total, and perform no other purpose. This is still useful if you lose an earbud on the subway, or if your charging case lid snaps off, but it opens the door for an exploit as well.
If you have a set of AirPods and you want to jump the line at Apple to buy another set and sell them to someone else, you can simply 'lose' each piece of your set of AirPods. Once you have a complete set of all three parts, you can assemble a fully standalone AirPods and sell it, using the parts that you got from repair.
To prevent this, repair sets their prices for the individual parts to exceed the final unit price of the whole. This isn't a big deal if you damage one part only
Repair costs probably also include 'expedited priority' versus those purchasing new products for the first time, so if there was a waiting list of 4-6 weeks to buy new AirPods, repair's full replacement price would bypass that list and get you your replacements immediately.
They still should have told you on the phone that the repair cost exceeds the repurchase cost and offered to discount the price in exchange for whatever the current wait is for folks buying them on the website.