that is a typical response of a frustrated owner. I've been in those shoes. I've been in the tech's shoes and the service manager's shoes too. I have not been in the shoes of a kubota tech rep though; although I worked alongside them closely for a number of years. 3 decades actually.
On the BX's, it's not uncommon for junk to get down into the tank and it can often plug the tank outlet, maybe partially or maybe completely. Algae does in fact grow in diesel fuel. So that is also a possibility. Water isn't uncommon either, and I can tell you this about water in diesel: it's not always caught by a water separating filter. Some of it can stay suspended. It's a HUGE issue with the trucking industry, well and with any diesel engine that uses a common rail injection system. CR injection is extremely sensitive to water. A few parts per million can cause damage. And diesel SITS in tanks, especially off-road diesel and in tractors. Luckly your bx doesn't have a common rail engine, and can tolerate a very small amount of water. When I say small amount I mean an ounce to 5 gal.
I do believe the issue lies in the fuel tank itself based on the frustrated OP's descriptions. Unfortunately, on a BX, there is no easy way to get the tank out to clean it. It's buried under the seat so you have to remove the seat both fenders flooboard roll bar some wirings, etc to access the tank, then pull it off and flush or replace it. It's typically a 2-3 hour job for a seasoned tech. A lot of them want to replace the tank and the reasoning is that if they flush it they don't really know if they got all the junk out because of the shape of the tank, and IF they don't get it all and it comes back, they (the shop) is on the hook for the repair and secondly and more importantly the tractor's owner has lost all confidence in the dealer if they have to take it back a second time for the same repair. Understandable. The downside of replacing the tank is cost, obviously.
my personal SOP for a repair such as this, give the owner the option. Replace (the correct way) or try to flush it/clean the system, with no guarantee that it's going to be a permanent fix. Then the owner has made the decision based on their needs and wishes. "Most" of the time they choose #2 and then if there is an issue, they aren't as pissed because they chose that option.
So 3 hours labor + the tank + all the fees and taxes? Yeah I can see $1000. Do I agree with it? Not really. Not even as a service tech. But understand that us techs have little to do with what things cost. We have to look at the bigger picture and make a decision that is best for the customer and that often costs, maybe more than the owner thinks it should. Oftentimes more than "I" think it should. Trust me when I say, if we could do it for free, we would.
Here's another scenario. If in fact the fuel tank had plastic debris inside of it from manufacturing, then Kubota would be on the hook for it. But that has to be proven, and proving it is not easy. I've done it and I've seen it happen; and kubota will eat the cost if THEY left manufacturing debris in it. At 50 hours, it's a remote possibility.