that seems a bit high to me. what exactly is this 3.5g mini keg? i've seen 2.5 and 3 gallon cornelius kegs. not sure if i've seen 3.5 though. if it is a 3.5 cornelius keg, than that would be a decent deal, because you could probably sell the keg for a decent amount of money.
a 5# co2 tank can be bought new for 70 or so. a regulator can be bought new for 40. what tubing, and what connections? at most, it would be a fair price for new equipment, but i would not pay nearly that much for used equipment.
if you could give us a picture of it, that would help. i am still wondering about the keg.
the co2 tank is within test, the test is good for five years from the stamp, after that, it needs to be hydrotested again.
i usually pay 20 dollars for used tanks out of test. it costs 18 for the test, and usually less than 14 on the fill, depending on size of the tank. i generally use 20# tanks though. (i do have a 50#, 4x20#, 10#, and a 2.5# though) so for around 50 i get a full tank within test.
i would say to haggle with him, and if he isn't willing to go lower, just get the equipment new for about the same price. this is of course dependent on that keg, as i don't know what kind of keg it is.