$10k? That is a lot of money. I honestly wouldn't mind spending $1200 on a well bred yorkie. A good breeder spends a lot more than $1200 on health tests on the breeding pair, and loses a good chunk of time caring for the mom and little ones. In the end, $1200 to differ the costs (so they can invest in their lines, which includes the $$ it takes to show and get approval on their breeding stock) seems like such a small amount. A good breeder will also offer a lifetime guarantee of support and knowledge.
I think it makes me sound like a picky person, but it's better to be picky than not. I'm glad your breeder took the time to educate you on the yorkie breed. That's a plus in my book.