Yes, once abscessed removal is best.
He's recommending sedation because there is bigger profit. Any pediatric dentist worth their salt can extract 2 teeth on a 7 year old under nitrous unless they have had a bad experience in the past and will be a difficult behavior. In fact, when they are abscessed the bone is destroyed and they are that much easier.
I personally, for a child who is cooperative, at least give it a shot under nitrous with lots of patience and TLC. What's the worst case scenario? If she has a hard time then you don't push it and go with the sedation. More times than not the teeth are out and the child doesn't even know it, and you save mom and dad a lot of money.
Their fee for sedation is still high. In the office I previously worked in (which can be considered 'high end') extraction of 2 teeth under oral sedation would run about 700$. And we weren't cheap-
Check out
http://www.debraduffydds.com/. My friend is the associate there (Laura Carter). Cute girl and great pediatric dentist. She'll take good care of your daughter if you go there.
At the very least I would get a 2nd opinion.