I thought it was clear from my question, but perhaps not -- I'm not writing code for the thing at the other end of the connection. It's a piece of equipment whose only interface is a serial port, and the only protocol it uses for file transfer is zmodem. The fact that it's on a terminal server is a convenience -- keeps us from having to physically hook a PC up to it whenever we want to do something with it.
Unless I'm missing something, that pretty much locks me into zmodem over telnet, no matter how retarded it sounds.