Is this hub beyond repair?
https://www.parktool.com/blog/repair-help/hub-overhaul-and-adjustment might be worth a read. 

The cones do not look too bad.  Hard to see from the photo what the hub is like - are the hub cups pitted? This is what will require replacement. If the cups are not replaceable, the free-hub body might be. However, it boils down to cost and parts availability. Chances are a new wheel will be cheaper than replacing the hub if the hub cannot be rebuilt.

If the cups are not too bad, I would go with new bearings and cones as these are cheap.  

From the shops point of view, if they try to service the hub and it fails after a short time, they are on the hook and their reputation is toast. As big chunk of the cost of servicing is labor so it's more cost effective to replace rather than repair. If you are prepared to do it yourself it costs a small amount of money to gets a bit more life from the hub, making a service worth while.