$1200 isn't bad at all but they probably quoted that using the cheapest possible gears like Genuine Gear which is their house brand. I paid $1087 for my last regearing job which included Spicer gears which is about the best you can get. I'd ask them to sharpen their pencil a bit more, their first price is usually what they hope
you'll agree to.
Don't listen to that guy at 4WD who said 4.56 would be ideal for 33" tires and your 2.5L engine, he doesn't know what he's talking about.