Reflectors are provided with your bike, and sometimes mounted for liability reasons and to comply with local laws. The bike shop would have no responsibility for the damage to your frame as a result, unless you can prove they mounted them improperly. Contact your LBS about a crash replacement and see if that's an option.
If you really want to buy a new bike and dont want to fix it I say sell the bike on craigslist or something and get looking for a new tri bike. If its just the fork that is damaged and you dont want to spend a lot of money on a new bike right now you can just buy a new fork. I doubt the bike shop or trek will take responsibility for this. They will probably say that it is your responsibility to make sure that your bike is properly maintained, and it was mounted properly if you could put in all those hours of training for a 1/2 IM without any problems.
I find it hard to believe that a reflector hitting it for 20 seconds would crack a frame. Even if the wheel is spinning at considerable speed, the reflector is so light that the impact would not be that high.. Could it be that the damage is only in the clearcoat (meaning it has cracked the clearcoat but not the frame itself)?
I would guess they are saying . A race bike should have all those unnecessary bits removed before the race. Good job on the race It is a shame about the problem You need to post a pic so we can see the damage or take it to a shop .