Can't activate iPhone 8

You cannot activate an iPhone without a SIM card. If you are having a hardware problem, then you are going to have to make a Genius Bar appointment to have the device checked by Apple.

What makes you think that you have a hardware problem with the phone? Do you see a message on the iPhone screen? What is the exact message you are seeing?

Once you formatted the phone, you need to re-activate it. To do that, you need a SIM. Without a SIM you cannot activate the phone. If it won't activate with a SIM, then there is something else wrong. However, if you had Apple examine a phone and they said there was a hardware error, then that is what is wrong. If the phone is out of warranty, of course you will have to pay for it. More than likely the price quoted is an out of warranty replacement cost, since Apple does not do on-site repairs for the iPhone except for screen and battery replacements. You would be receiving a refurbished phone with a 90-day warranty.

You need a sim to activate. No way around this fact.

There is no way around a hardware problem.

Apple already explained your options, whether you choose to get a replacement phone is up to you.