1999 Polaris Indy 340 rear suspension shock...

Babbitts online shows an OEM part 7041739 for $143.99.

Just curious where you're getting the Kimpex part number from. I've found some considerable mis-matches from online sources, that's how I ended up with a pair of hi-fax for an XTRA-Lite skid from DennisKirk. The best way to match aftermarket parts is if it tells you "replaces OEM xxxxxxxx," but that should match the extended/compressed lengths. It's getting harder and harder to find replacement parts for these older sleds, especially anything OE quality, but there should be something out there.

That's normal, most older OE shocks (and typical replacements) weren't gas shocks. So, if you compress them, they'll just stay there. Of course, even if it's still got some resistance it may not be doing a lot for you. Even, say, a 5-year-old shock will degrade significantly in typical use from water intrusion and oil degradation. People talk about a night and day difference going to a new sled, but some of the difference is from riding on old, worn-out shocks. Obviously there's more to it than the shocks, but you'd notice a big difference just going to new quality gas shocks all around on an older sled. Not that you can necessarily find those, unfortunately! Anyway, probably not super-critical on the kids sled (depending on how much riding it sees), just depends on how weak the shock feels and what level of performance you're looking for.