The cost of dongles is higher than you think. It sounds like you might have an issue with the Dongle quality -- why don't you try to get it swapped (ie, you send the old broken one back) instead of just getting a new one.
I have seen fees of $175 and up for other companies using the Aladdin and Rainbow dongles so I don't think this is that far out of line. I would think that a $250 investment in software you've been using for a couple of years doesn't sound unreasonable.
One last idea -- perhaps they would upgrade you to XR3 (or the upcoming XR4) with a new dongle at a price that you would find a fair value.