The thing is this...it is now a safety issue. If the leather rotted away, then it is also in danger of failing in other places. IF it was a good quality saddle to begin with, then yes, it would be worth fixing, but in this case, I do not think it is.
Up to you of course, but if it were me, I would tell her the repairs are too costly, and there are possibly other issues with saddle that you are not equipped to handle, or pay for.
But all in all, if you fix this and ride this, you will be hitting the dirt quickly. Just not worth a broken bone, or a hearse ride to me.
Horses make me a better person.