I agree that the consequences of a crash are far too minor right now in LFS. You can reset your car, you can telepit, you can repair any damage during a pitstop, etc. Indeed, LFS, atleast on public servers, seems to be a more like "we hotlap together" instead of actual careful racing, where you don't give 100% all the time.
A good comparison is RBR, in my opinion. While it simulates a completely different kind of racing, the consequences of a crash shift the game pretty effectively from "hotlapping" to "risk control", atleast for the drivers that don't rally 25 hours a day. If you crash, there's a very high chance the car is totaled, and if you do that during a championship, the whole current rally is lost, giving your chances of winning a big hit.
Granted, circuit racing is a bit different than the more risky rallying, but the cars are really treated like single-use cans of metal (becaue they are) instead of a racecar you have to take care of. Crash on T1? No problem, Shift-S and continue. Had to evade T1 crash and got stuck in sand? No problem, Shif...
I have said it before, and I'll say it again, LFS now seems to be a bit in "debug" mode, where features like reset are very useful. I hope LFS will go through a big cleanup step before S2 final, making the whole race setup and management more realistic. A complete damage model would also help, but I guess I'm beating a dead horse with that