I dropped the SEUC off at my local dealer last night and got the following quote on the EW:
2 years........$1499
3 years........$1799 (including tire and wheel option)
Yes, they can charge anything they want. I am pretty sure Jenni will get my
business! 
Things have changed over the years so there may be a few states with some control over Extended Warranty (EW) policy charges. However, only Life and Disability have Rate controls. In many cases, the
lender will have a policy to limit what is charged for EW if it is included in the contract.
The lender
can't require that the EW policy be purchased, but sometimes the F&I person at the dealership will say "I (suggesting the financial institution like HD Credit) can knock a point off the finance rate
if you purchase the extended warranty". All this does is put money in their pockets today versus earning that 1 point spread over the life of the contract in the finance charge.
In the old days, some dealers were "self insuring" their extended warranties, but the banks and other lenders put a stop to that since they are responsible for providing coverage if the dealer sold their store or went out of business (I think the contract has the
Holder in due course statement that makes them liable).
Jenni's deal looks pretty good. The dealer still makes money.