The factory hardens seats by induction; i.e. they stick a probe that creates a powerful electromagnetic field into the area, which causes a large current to flow in the casting right around it, which heats it up red-hot and hardens it. This is different from "inserts" such as a machine shop would use. They started induction-hardening the seats at about the time that catalytic converters, and therefore unleaded gas, were becoming legal requirements, starting in California.
Well-installed seat inserts work perfectly fine. In fact essentially ALL aluminum heads have them, for obvious reasons. Your machinist did the right thing, IMO; assuming of course that the cut for the insert is neat and all that sort of stuff. That's the common tactic for updating pre-hardening heads to use modern gas. But, it costs money; and unless there's some kind of inherent value in a set of some old stock heads, they're not usually a cost-effective mod. Especially not in a case like the OP seems to be in.
I am telling the OP to watch out for the seats, because you can buy those old heads like 702 and such, all day long; but if you run them any significant mileage on the street, the valves may erode the head rapidly. It's possible for them to get so far chewed through that they can't be repaired. Once the erosion starts, it can be quite rapid. So regardless of which head casting "makes the most power", there's a cost vs reliability issue that must be settled satisfactorily.
Another feature of newer heads including 820 but AFAIK not 290 is the "squish" area under the spark plug. This make a HUGE difference to detonation resistance. Again, it was introduced when fuel octane ratings fell due to the reduction and eventual elimination of the lead additive, so typical 60s heads don't have it. It appeared gradually starting in about 69 or so. But from 73 or so up, the chambers are HUGE, like 781 for example. Great heads as everybody knows, but TOTALLY WRONG for some combos. Just jamming a set of 781s on a stock 402 short block is a dreadful mistake, in spite of the flow and the hardened seats and the "squish", because the compression will be so low. Yet another example of why the "max HP" approach to head selection, with blinders on to all else, can lead one astray if it leads to a bad combo. There's alot of variables to consider.