This seems like a situation that could go either way. Mastering them on the mill makes sense if you've got one; you can make a pattern board for sandcasting pretty easily. 50/week is small for a casting run, and fairly reasonable for machining. On the other hand, if you wanted 500 of them, the economics of casting would prevail, I'd think, and you would have enough of them to do something else with your mill for the next 10 weeks.
Yes, milling to a depth of 1 mm around a letter is called Face Milling.
I don't see CNC milling as antagonistic to casting; it's a tool that makes it easier to do many casting-related tasks.
Andrew Werby
www.computersculpture.com