1. Myself, I'd touch up the paint and ride it.
2. That said, I can understand being upset. With the crappy service I'd just avoid the LBS in the future and make sure they didn't get good word of mouth from you.
3. Most importantly...tossing aside the issue of whether you should fight this or not, this is why you always always always pay with a credit card. If you absolutely can't live with the scratches, drop the bike off at the shop and stop payment. No grey area. You walk away and go somewhere else.