Well I don’t think an 18GS30 was oversized if you needed 25 GPM at 50 PSI from 250’ depth. If the pumping level stays close to 113’, a smaller pump could have been used. But pumps are usually sized for the total depth of the well, just in case the water level drops. If they “up-sold” you to the “drive” because they think it is a superior type of system, then I would also be concerned about their knowledge with well construction.
As for the gravel and casing problem, that is quite a cluster. I wish the videotape could at least show what was at the 200’ mark before all this happened. Was it smaller casing below 205’ or not? Is the casing broken in this area before the swabbing and air lift? Or was it the tool getting stuck that broke the casing?
Either way I would think the casing is broken if the gravel has filled into 200’. The best way to fix it will probably be to just drill another well. If I had broken your old well casing, I would at least offer a big discount on drilling you a new well, because you are right about the old well now being a “money pit”.