Should we sand and prime holes in our walls or pay someone to do it?
If the holes are already patched and all your are doing is sanding it down to a smooth finish before you prime, it will be way less than 5 minutes per patch.

Personally I would do it myself but how valuable your time is something only you can answer.  If you get the sand paper made specifically for sanding joint compound (like this it will go really fast.  Obviously doing the whole house will take a while but I think your esitmate of 5 minutes per patch it high.  Though if you pay someone else, would they be doing "wet sanding" to reduce the amount of dust in the rooms (that is something I have not done and I don't know how much harder it would be)?  That may be a consideration unless your rooms are already a mess from the actual insulation procedure.