I did my site using iWeb from Apple. It's not perfect, but it was easy. There's also jalbum for a add your own and customize it type site (it has more capabilities than iWeb).
If someone else does it, I could see $500-$2000 depending on the details. I agree that being off by 70% is a sign that your friend didn't really know what he was getting into.
IMO, it's better to use a ready-made program where you can drag and drop your photos in rather than doing a full reinvent the wheel site unless you're in IT and like to sit and fiddle with it a lot.