Tiagra instead of Deore? That doesn't make sense to me. And that price is ridiculous :|
Why didn't they just install a shorter stem so that you have no issues regarding reach?
There are flat-bar shifters that are also Tiagra. Weird, I know.
And yes, I think it's a downgrade. You'll pay for the labor, but I think they should at least give you something for the parts, or give you the parts so you can put them on eBay or something.