Well I think its a 16gb 3G he has. I dont know where you guys are getting your pricing from but the average seems to be about $400-500 for one on ebay. The HIGHEST one with a bid on it right now is one at $600, and the next at $550. If the Nexus is $575 or so, then its right there averaged.
If it was 16 or 32GB 3GS then Id agree, but in this case its a pretty even trade honestly if OP can do an even trade. But I do agree $100 plus the phone is BS. Theyre worth about the same.