OK. I'll admit I am primarily a graphic designer these days, but I came up through the sign business, so I look at design through the lens of a sign guy. I still sell a lot of signs, but I no longer have a big sign shop, equipment and a bunch of employees.
It is not uncommon to get a request like the OP got. I will always produce a design along the lines of the original request, but I will often throw out a completely new concept. I have a long list of clients who have re-energized their business with a new logo and branding concept. This has led to many long term relations, and a lot of new business designing not only signs but collateral marketing materials, web sides, vehicle graphics, advertising, etc. Because my overhead is tiny compared to full service sign shop, the economic pressures on me are different. My clients come to me for my design services, not because I have a shop full of equipment and a fleet of service trucks.
Last week a customer approached me to do a vinyl logo on their storefront window. They already had a logo; they just wanted me to cut it in vinyl and stick it on. I gave them a price, but I also showed them some different logo options, and explained to them how they could expand that into a totally refreshed identity program. Today, at their request, I went out and surveyed their location, and I will be presenting a complete storefront design including a new logo. They are also interested in a new website, and three vehicle wraps with the new branding. They are repainting their interior, and are planning on a new interior graphics package, merchandising collateral, and a coordinated social media campaign.
I have another client who is now actively searching for a new location after first contacting me for a replacement sign face. A $2k job has turned into what could amount to $tens of thousands with an entirely new branding package, new signs, menus, web page, and a digital message center on a pylon sign in a high traffic count area.
Sometimes reinventing the wheel is the right thing to do!