"Isn't black pipe rated to 300psi?
I have worked in shops that had 150psi in the air lines."
You raise a valid point. However, once you remove pipe wall thickness by cutting threads you reduce the safe working pressure to closer to 200 psi, depending on actual pipe size. This is for normal Sched. 40 black steel. The heavier wall thickness Sched. 80 is much higher pressure rated.
Remember that pipe produced under ASTM A-53 is seamed tubing, joined by welding. I have seen split piping!
If the intent is to design for an operating pressure of 150 psi, every component in that system must be rated to safely operate at that pressure. Compressed air systems are such systems, and should be constructed with an adequate safety factor to allow safe operation. However the OP is talking about a propane gas line, not a compressed air line.
For a gas line, different operating requirements apply. A standard gas shut-off **** (isolation valve) that would be installed at the appliance is typically rated for 0.5 psi. Even the main service shut-off valves are, to the best of my knowledge, rated only to 125 psi. By testing a gas line at 175 psi, or roughly 100 times the normal operating pressure, you are going to find the weak link in the system, most likely in a very dramatic manner.
If the gas-fired heater was exposed to these pressures I would suspect that it has been permanently damaged. As a matter of fact, I would be surprised if the heater didn't explode at such pressures.
So the point I am trying to make is that any mechanical system should be tested according to its intended purpose. You don't test a plumbing vent according to domestic water standards for example.
For (generally) any system, testing at 150% of operating pressure, or at the most 200% of operating pressure, is adequate to properly assess the system. Note that this applies to air testing, not hydrostatic testing.
"If some is good, more must be better" does not apply in this matter.
As always, offered only as opinion