Not really. But there is a grain of truth in it.
What they are saying is that your image had excess resolution and they had to downsample it by about 30%. This is not an extraordinary amount; all but the most professional labs resample images, often much more than that. (Professional labs sometimes require you to supply the images with exact dimensions/resolution, but this would be too onerous a demand for most people).
Yes, any resampling (up and down) loses a bit of sharpness in most circumstances. There are images that may visibly suffer from it (notably line art and drawings). But for typical photos 30% downsampling should not be too noticeable. If you had enough sharpness (not to be confused with resolution!) to start with, the resulting downsampled image should still look sharp.
Nevertheless, downsampling is destructive, and there are methods to compensate for it. Generally, this means applying some form of sharpening after downsampling (even if the initial image was perfectly sharp). This can be 'baked in' to the resampling algorithm, or be a standard unsharp mask. Also, when resampling by a large amount, it is usually better to do in several smaller steps. But, like with any post-processing, overdoing it may ruin the image.
For this reason, most labs don't bother with any smarts and just apply standard resampling, at best with some built-in sharpening parameters. So, you are better off doing it yourself. Not unlike preparing the image for a pro lab.
Now, I will assume your image is indeed "super sharp", such that if you zoom it to 100% it still looks reasonably sharp. (In practice, most bad prints are 'user error' and simply come from blurry images).
In most professional workflows there is a step usually called 'output sharpening'. Unlike the normal processing sharpening, its parameters primarily depend on the physical dimensions of the image and the medium, rather than on the image itself.
Even if your photo is already the right resolution (number of pixels for the print), it will still benefit from output sharpening. Without processing, prints will invariably look softer than on-screen image: they (usually) have less contrast, their
'pixels' are not as sharp, the surface is more diffuse, etc. To have good subjective sharpness on, say, matt paper, you may need to sharpen the image considerably, and it will look painfully oversharpened on screen (especially if you zoom in).
So, your final processing steps should be like this.
Crop the image to have the right proportions. (Note that 8x10 is more 'squarish' than the raw image from most cameras). How you crop depends, of course, on the subject and your artistic needs.
Do your regular adjustments, if necessary (colour, contrast, etc.)
Save the image as a high-quality jpeg or even lossless, if you want to keep it. What we are going to do next applies only for this print, will be saved separately and can be deleted after printing.
Resample the image to have the right physical resolution. This depends on what the lab advised. If they said 300 ppi, resample to 300 ppi, whatever the number of pixels this results in. Most decent photo editors let you specify this number (and the physical dimensions) directly when resampling, but more primitive tools designed for on-screen viewing may only work with pixels, in which case you'll need to calculate them yourself. (So, for 10" print at 300 dpi you'll need 3000 pixels along this edge).
Note: if your software has an option to do a sharpening resampling (like 'Bicubic sharper'), use it. Otherwise, you might apply a very moderate sharpening with radius about 1 and amount 20-30%. This is only to compensate 'mathematical' losses of resampling. But given that we are about to apply a more aggressive output sharpening, this is not necessary.
Now the more difficult part. Zoom the image out to have approximately the same physical size on your screen as the intended print, maybe a bit larger. If possible, select an 'even' pixel scale like 25 or 50%. Yes, the pixel resolution of a computer display, even a 'retina' one, is usually lower than that of a print, and yes, we are undergoing an extra (low quality) resampling.1 But it's still a better representation of the effect than the pixel-peeping 100% that you use when doing your regular image sharpening.
Use a regular sharpening tool such as unsharp mask. Here, you need to choose the parameters that give some visible effect to the image as it's displayed. These parameters will be unlike those for regular sharpening. Most importantly, the 'Radius' will be larger. In normal image sharpening, you usually have it around 1. But now we need it to be of a physical, visible size. Say, for 0.5 mm you'll have about 5-6 pixels. The 'Amount' may be lower than usual, 30-50%, but may be higher: it depends on the image. You should just see the effect on your screen. (It is convenient to be able to toggle preview of the effect, if your editor allows it). The exact parameters will be gained with experience. You might also search specific guides for output sharpening: I'm sure there must be quite a few out there.
Save the sharpened image to a separate file and send it to the lab for printing.
If you are not happy with the result, don't re-edit the lab file. Start off the file you saved in the middle step, resample it again and try different sharpening.
There are specialised tools (usually plug-ins) designed specifically for output sharpening (and generally processing). There you might enter your physical output properties such as size, printer type and paper type, and they will apply optimised parameters. But for one-off print this may be an overkill, and it's useful to try sharpening yourself for better understanding.
1 Some tools (primarily the specialised image viewers) may apply on-the-fly sharpening for the preview images. This is also a form of output sharpening. But in this case it will interfere with your editing, and if there such an option in your software, it needs to be disabled.
