For a suspected meniscus tear, an MRI is typically required. Some meniscus tears are not particularly suitable for surgical repair, as there is little blood supply in that area (and outcomes for meniscus tears with surgery is fairly comparable to those without surgery). An insurance company is going to need an MRI before they pay for surgery - that's common practice. An MRI is far from 100% accurate, but it's enough to get an idea of what's going on.
Personal anecdote: I've spent a lot of time in ortho's offices - I have chronic dislocations, 2 scopes, and a reconstruction (not to mention working in an ortho practice for several years). OS was about positive I had a meniscus tear, MR was inconclusive, a bit more investigation - final determination was pes bursitis (that little bursa that's just below the knee).
The rest, ibuprofen, and icing is not surprising. I mentioned above that type of tear is not always surgically repairable - it depends greatly on the location and severity. If they remove the meniscus because it's severe, arthritis is an issue. Usually a conservative course of physical therapy is done first (so I'm pretty surprised that wasn't recommended).
A $700 is on the low end of the deductible spectrum, to be honest (it's lower than mine and I work for a hospital). You can write your medical expenses off on your taxes. Most health care providers are very willing to negotiate costs and/or payment plans.
To find another doctor, you can cross-reference physicians from your medical plan (and staying in network is going to be boatloads cheaper) with reviews and referrals from your own network of people. You can ask team coaches in your area who they send their athletes too as well. I specifically seek out sports OS, in my experience they tend to be much more focused on functionality.
I know you're frustrated. Until the practice or hospital submits an authorization request for a scope through your insurance, they're not going to have much to tell you as far as cost. You should have an oop max, so unless it's sky-high, you probably wouldn't be out the entire 1:1 after the deductible.