Ben, Simpson's is a retail business, and the price you see on that listing reflects a retail price (including their overhead, profit, authentication, support and original acquisition cost.
The Navy in the post is in phenomenal condition, which is quite unusual as Navy Lugers were often exposed to corrosive conditions since they served on the sea and in the seaports.
Good decision not to shoot this one. They really do break. You'll find post shooting damage postings here and on the other collector forums. It would really be a shame to damage this one.
As you care for it, ensure that you keep it in low humidity conditions and away from things like leather holsters (which can lead to finish deterioration).
Your Grandfather has given you some amazing collectable Lugers. We are the caretakers of history.
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 Igitur si vis pacem, para bellum -
- Therefore if you want peace, prepare for war.
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