A couple of years ago we had a new seat tube fitted to my wifes bike (a 20 year old Claud Butler Lady Dale) after it sheared where it joined the top tube - this was on a step through frame. Fortunately we live close enough to Roberts, one of the few frame builders in the UK, to be able to deliver it. I had to strip the frame for them and it cost about £150. They completely stripped the paint off the frame so we had it powder coated - approx £100.
We did this as she really likes the bike and finds it comfortable for long rides. I don't think that we could get something similar for the price.
If you want to get a new seat tube, you will probably have to send it away. None of the local bike shops would consider it - they make money selling new bikes after all. I think that only Mercian and Roberts offered a quote.
Hopefully this has given you an idea of the costs and what is involved. If you like your bike as it is then it can be a viable option. I suspect that the longer seat post may be the cheaper alternative.