Oh, how sad -- the thought that any fair not exhibiting each and every quilt is a terrible thing. Your quilt is lovely and you did a great job, especially with your prairie points.
You should write a letter to the editor of your paper and let them know how hurt you were and also to let others know what could happen to them. Those who exhibit in the future will need to know and perhaps your fair will change their habits.
At our local fair not all quilts are hung but those that are not are nicely draped over chairs, etc. I hope you do not get discouraged. Continue your quilting and don't be afraid to exhibit.