What you describe (worn rims from braking, worn out drive train, brakes need fettling) is just ordinary wear and tear. The mechanic is right to point out that you have a choice: fix up this bike or buy a whole new bike for not much more.
And as others point out, if you do this at home you save the labour costs and could do it for significantly less, but it will take up time, and may require outlay on tools.
Bike components do have a life span, especially the drive train, tyres, braking surfaces and cabling. But this is less true about bikes themselves - especially if you keep on top of maintenance with regular inspection and replacement of bits as and when needed.
So ... write the bike off and get a nicer, better new one or spend a bit less and keep this one on the road? Both entirely valid approaches and only your partner can make that decision.
Whichever you choose, do try to keep on top of maintenance and don't let the bike get into a condition where it needs a whole load of work all at once. Without wishing to sound too finger-wagging - if you (or your partner) had spread this work over the past few years you wouldn't have noticed the cost so much and the bike would now be fine.