As I said, economies of scale. Doing a 1000 print run on less than super-premium leather would be ideal circumstances. Its how Grim Oaks, or Sub Press, etc, can sell their books for <$300 and make good margins. Having Bakker agree to get a s/l print done somewhere would be ideal for all parties (more affordable and likely of similar or higher quality, especially because you can print on higher quality paper). Grim Oaks has Shannara up for $100, leatherbound. Easton Press does similar work, though their prints can be in the 10k+ unit range.
8.5x5.25 makes me jealous. I'd have to get a new stamp made, but I have a bitmap file that I personally created using copies of Rankine's original artwork that I bribed him for. If you look close enough, you'll notice slight differences from the ones printed in PoN compared to the ones I made. That took weeks because I'm an amateur, but I did it, damn it.
You used pounds as your monetary unit, so I assume you're in the UK. If that's the case, then I'd assume you'd be able to get this done yourself - probably even for cheaper. The leather I got was imported from England, binders are fewer here so are probably more expensive. The only thing you'd be missing would be the die. Which you could have made yourself or I could work something out with you and send one your way. But again, since bookbinding is more popular in UK/EU, such services may be cheaper and easier to find.
A larger die will make for an easier stamp since the fine details wont be so fine.
Rankine is very... lets say 'particular'... about the use of his art. Reproducing his art onto covers enmasse would probably come at a hefty cost, and likely just be impossible. I have an agreement with him for free personal use and a reproduction fee if I sell any books.
Also, with the stamping, it can be tricky, especially with art as intricate of the PoN covers. When you do a big run, you can afford to screw up a few covers and just re-print them. It also lets you dial in the machine so once its printing perfect copies, you don't have to worry about it. When you've only got 1 shot and a limited budget, messing up really just isn't an option, thus the need for the in-laid leather that I'll be having.