In my opinion, it is definitely too high for that gun. It's in very nice condition, with all the goodies, but there is no doubt that it's been fired. You could hold out and find a LNIB example for less than what that one went for. I could see (maybe) around $1,000, but not $1,325...
It looks like a newbie escalated the bid price, and the bid winner just wanted that gun. In theory, the gun is worth what was paid; it was an auction. I'm not sure about all this 'shill' bidder stuff, but you never know... Even so, the guy that bought it still thought it was worth what he paid, and he's got a lot of feedback, so he's not a newbie...
I think it's a sign of pricing to come... As a lot of people have said, when you look at what S&W is getting for their new revolvers, you can see why the older ones in good condition are bringing in the high prices; they do not make em like that anymore... But, I still think this bidder could have done much better by waiting for a better deal.