Contextually, Bob's correct

If the campaign is a series of tombs of horrors, then that ring of cure light wounds is an item beyond price. If the party can't leave the dungeon to resupply and can't get down to one encounter per day (i.e. the so-called 15-minute workday) via spells¹, that ring of cure light wounds is a literal lifesaver.

In other words, if the campaign is already on hard mode, the ring switches it not to easy mode, certainly, but to average mode. That's a legitimate concern for the DM. The DM's already decided the campaign's supposed to be difficult and the ring makes the campaign substantially less difficult. As the ring violates a central campaign tenet, the ring just shouldn't be available… or only available as a result of a heinous Gygaxian Faustian bargain.

For the game as it was likely envisioned, Erin's correct

The Dungeon Master's Guide would likely pick Erin's suggestion. If worry-free, constant healing is desired, everybody should pony up for rings of regeneration (DMG 232) (90,000 gp; 0 lbs.). Sure, each ring of regeneration costs as much as 120 wands of cure light wounds [conj] (PH 215–16) (1st-level spell at caster level 1) (15 gp/charge), but, y'know, the Dungeon Master's Guide says to "[u]se good sense when assigning prices, using the items in this book as examples" (282), and the ring of regeneration presents the example of the price of worry-free, constant healing, so that is the price of worry-free healing. In fact, an original magic item like a use-activated ring of cure light wounds—like a continuous item of true strike [div] (PH 296)—is such an anathema, I'm willing to bet were the year 2000 Dungeon Master's Guide a DM that it would laugh at the player who suggested a ring of cure light wounds and maybe have the next wandering monster attack him first just for asking.

For many games as they are now, Alice or Dave is correct

Many current players feel that constantly reacquiring wands of cure light wounds to have their characters freshen up between encounters is, at worst, a mere inconvenience, like tracking how many arrows remain in a quiver. In the same way that being short on arrows creates tension at low levels, managing healing resources at low levels creates tension. Many players, though, feel that by the time a character's reached a reasonably high level—say, 9 or so—that the character should have more important things to worry about than how many arrows he has left, and he shouldn't worry that he's burning party resources because he fell down a 200-ft.-deep pit. A Ftr9's Wealth by Level (Dungeon Master's Guide (203) 135) says that a wand of cure light wounds—that is, an entire wand, fully charged—is only about 2% of the gear he's toting. Seriously, after splitting four ways the take from a lone level-appropriate encounter, a Ftr9 can buy a whole new fresh wand of cure light wounds and still have gp left over.

If a DM has players like Alice and Dave, a ring of cure light wounds makes the game more fun because it cuts down on tracking charges from wands of cure light wounds, and the DM should probably allow it—either at low levels at Alice's price or higher levels at Dave's price—unless the DM's vision of the game differs substantially from that of the players' vision.

A brief history of the ring of regeneration

As the sole item that grants continuous healing in core Dungeons and Dragons 3.5, the ring of regeneration is terrible and using it as an example of what continuous healing should cost is terrible. I'll explain.

Building as they were in 2000 from Advanced Dungeons and Dragons, 2nd Edition, the ring of regeneration included in the Dungeon Master's Guide for Dungeons and Dragons, Third Edition probably looked fine to the original core rules' authors. The changes made to the ring of regeneration were a much needed nerf to improvement over Advanced Dungeons and Dragons, 2nd Edition's ring of regeneration, which, for the record,

restores 1 point of damage each turn [10 minutes] and eventually replaces lost limbs and organs. It will bring its wearer back from death…. Only total destruction of all living tissue by fire, acid, or similar means will prevent regeneration. Of course, the ring must be worn, and its removal stops the regeneration process.² (Encyclopedia Magica, Vol. 3 993)

Such an item was highly coveted in both Advanced Dungeons and Dragons (where it functioned similarly) and Advanced Dungeons and Dragons, 2nd Edition, and for good reason. One's character could lose limbs and organs. ("Why, hello there, sword of sharpness!") Dying was really painful instead of the speed bump that it typically is in Dungeons & Dragons, Third Edition. And healing was, itself, extremely valuable, the province of classes that often weren't much fun to play and rarely advanced beyond level 6 through actual play.³

So when the time came to include the highly-sought-after ring of regeneration in Dungeons and Dragons, Third Edition, the price was set very high because legacy yet the ring's actual functionality plummeted. Creatures no longer lost limbs except under extremely rare circumstances. Creatures now healed their levels or HD in hp per 8 hours rest instead of just 1 point per day of rest. And gone was the jazz about the ring bringing the wearer back from the dead. The only improvement Dungeons and Dragons, Third Edition made to the ring was proportionate healing (that is, Third Edition's heals a creature's level in hp)… and then Third Edition multiplied the ring's healing increment by 6.

Anyway, the current ring of regeneration seriously sucks as useful measure by which to gauge unlimited healing.

¹ By, after the first encounter, hiding in, for example, the space created by the 2nd-level Sor/Wiz spell rope trick [trans] (Player's Handbook 273), the 5th-level initiate of Gruumsh (CR 24) spell pocket cave [conj] (Champions of Ruin 33), or the 7th-level Sor/Wiz spell Mordenkainen's magnificent mansion [conj] (PH 256).
² Okay, a similar means to fire is heat. Sure. I get that. That's a thing. But what's a similar means to acid except, like, better acid? I hope whoever wrote that spent his $0.10 from those words wisely.
³ I find the experience level chart for the cleric or priest, respectively, in Advanced Dungeons and Dragons or Advanced Dungeons and Dragons, 2nd Edition—when compared to classes' experience level charts—hilarious.

The Dragon #338 Sage Advice column "Official Answers to Your Questions" includes these exchanges:

Question 1

When I affix a dispel magic to my hallow spell, what type of dispel effect is it—a targeted dispel, area dispel, or counterspell? Can I choose when I create the hallow?

Answer

A dispel magic fixed to a hallow or unhallow spell can be treated only as an area dispel, not as a targeted dispel or a counterspell.

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Question 2

When a spell effect is fixed to a hallow spell, how do unusual durations (such as those of protection from energy) or instantaneous durations (such as those of dispel magic) work?

Answer

The spell effect fixed to a hallow or unhallow spell is treated as being cast on any eligible creature each time it enters.

In the case of “ablative” spell effects that are used up gradually (such as aid or protection from energy), the full effect of the spell is renewed each time the eligible creature re-enters the hallowed/unhallowed area (with the newer version entirely replacing the older version). In the case of instantaneous effects (such as dispel magic), the spell affects eligible creatures each time they enter. (84-5)

(Links mine.) The Sage at the time is Andy Collins. These exchanges are repeated in the D&D Frequently Asked Questions (82-3), with which some folks have issues. While in general such rulings can be controversial, these rulings make about as much sense as anything else, and the ruling have the added advantage of actually coming from one of the revised game's designers rather than, for instance, the dude who was answering the phones that day (a risk one takes with some of Wizards of the Coast's customer service rulings).

A quick search of Paizo's site revealed no immediate and stunning insight into or changes to the operation of the spell hallow for Pathfinder, so unless contradicted by a later designer (in which case I'll happily update this answer), these rulings seem equally functional in that game.