The cabinet is not worth 300-400. But the artwork on the cabinet could very well be if it were mint. Most every game is worth twice as much when its parted out. So if he is really trying to negotiate a price with that in the back of his head, he's being a douche. If he wants a fair price on an R-type sold as a whole, then $400-$500 is about right. They could pull more from the right collector if the economy were better, but folks are just not going to jump at that game for over 5 right now.
Most the value is in the board, but locating a machine with an unfaded set of marquee and control panel art is tough. I have seen 3 or 4 machines in the last 2-3 years. Each one had some sort of imperfection. Whether it was portions of sideart peeling/missing, yellowed marquees, or scratched bezels. They are out there. $500 max.