That's working as intended, although yes quite stupid. Some items just cannot be repaired. If it says "too expensive" (even if you are level 1) then you will never be able to repair it. If it CAN be repaired but you do not have enough XP it will just show you the required number of level in red. Also items become more and more expensive to repair the more you repair them. To a point of no return. Renaming the item will hard-save the current "repairable" state. So renaming the item when you first create it will cost you 30 levels but will insure that if it is repairable once, it will be repairable forever. At least that's how I understand it. Check out the enchant page on the wiki if you did not already know this.
How long would it take to make $250 with McFly's economy mod? Would it take longer than earning, say, 40 levels? Because I'm pretty sure it was supposed to be the way to repair when I last played.