Yes, it is a rip off. What's worse is that you are expected to pay this as a British citizen to bring your wife here, yet if you are European and want to bring your wife here with you, then you pay far less for a EEA permit. I can understand why so many British people are being forced into taking the 'Surinder Singh' route to get around the high VISA costs and ludicrous financial requirements.
You may also incur an additional fee from your bank for the dollar to sterling conversion, so it could be another £25 on top of that figure Andy.