adictd2tkdgirl,
I agree with the others here. The tuition of $100.00 per mo. is on the high end of the scale, but not outrageous. The testing fees for color belts are about average, but $1,000.00 for 1st Dan test (if that is what you are saying) is way over the top! Many organizations will add a small profit margin over the Kukkiwon fee (costing $100.00 to $200.00, and going up $50.00 to $100.00 per Degree). These fees help to build an organization, and provide services above and beyond classroom instruction.
As others have indicated, tuition will vary depending on the rank and skill level of your instructor, the economic climate where the school is located, and the amount of financial profit the instructor is motivated to seek out. Some highly skilled instructors do teach in their garage, or at a church or community center for a low cost, but often do not offer the full range of experiences available at a full time Dojang. Some of the fancy Dojangs might be run by instructors with very little experience, knowledge, and insights to offer for that kind of money.
One thing to consider though, is the way you phrased the subject: "Martial Arts an expensive hobby." If you think of it as a hobby, then I can see where the expense might not seem justified. What are any other hobbies that people have in which they invest thousands of dollars. If they are really passionate about it, maybe. However, in my opinion, studying the Martial Art as a life long journey of self improvement, self discovery, and for the protection of yourself, your loved ones, and innocent victims, makes it much more than a hobby.
I found a wall sign once that spoke about the importance of education. It read, "If you think education is expensive. . . try ignorance!"

This suggests that you could save money by not getting a higer education, but you will lose more in your lifetime by missing the opportunities for career advancement without an advanced education. I put the sign up at my Dojang, and pasted the word "Taekwondo" over education (to me, they are the same thing). It now reads, "If you think Taekwondo is expensive. . . try ignorance!" My meaning is that it costs a bit of money to learn this knowledge, however it is well worth the investment to benefit many aspects of your life, especially if you ever need self defense, but chose not to learn it because of the cost!
Just so long as you find a good, qualified instructor, and don't have to pay the thousands of dollars for Black Belt test fees. - Good Luck!
CM D. J. Eisenhart