Andy,
I'm not sure what your point here is. Are you selling these?
I see no defense for the manufacturing company in selling these for this price. There is a certain value to anything and no matter what you do to it, you aren't going to improve it enough to get over that barrier. An original sniper rifle with WWII setup in original configuration sells for $800 US, not because it is worth it quality wise but because of its collector value and rarity.
It's like taking an old Ford Escort, fixing it up real nice and selling it for $30,000. Why buy it when you can buy a brand new BMW for that price?
I own a lot of firearms and other than a few single shots I own, the Nagant's are the most primitive and simply put together rifles I own. I love them and they function perfectly but if I want to spend $1200 on a top notch shooter, it will be something other than a Nagant. No matter what you do to it, it has about the worst safety I've even seen, impractical for hunting and hard to use on the range.
I have bought two rifles in the last 6 months that are 1 moa out of the box and they cost me $400 complete with scope already mounted and have adjustable triggers and synthetic stocks and in calibers easily reloaded, 243 and 30-06.
On a side note, I did check out the Nagants at Cabela's last night. They didn't put them out on the rack this time around so I didn't spend much time looking. They were selling like crazy, 6 were purchased in the hour that I was there. All six were WWII manufacture, not bad condition but not as nice as the first batch they got in a few months ago.