It should give 500 reputation unless Lordaerons reputation rate is x0.5. And as far as I know it's x1. Accoring to Wowhead comments the quest always gave 500 reputation but at some point Wowhead said it gives 250 reputation, which could be why it's wrong here.
Most of the repeatable quests will start giving you less rep when you get to Honored/Revered ... most likely this is the case here!
That should not happen. They either give the amount of reputation they should or they stop giving reputation at all at some point. But according to Wowhead this quest doesn't stop giving reputation.