I seem lucky in that all my quilted gifts have been loved and adored. Remember the book,"The Velveteen Rabbit"? the beloved stuffed animal was so loved his fur was rubbed right off. And when this beloved rabbit had to be discarded because of some pre-antibiotic infection, how it became real? and years later, the little boy saw the real rabbit and thought of his beloved stuffed animal? This is how I want my quilts, especially baby and children's quilts, to be. Loved to death. I don't want my quilt to become anyone's heirloom, put away and only looked at on occasion.
And, about burying the dog in the quilt, I am sure this was meant as the highest of honors. I am sorry that you felt hurt. When I worked on a locked unit and one of the patients died, I had everyone work on a community, memorial quilt. It was gorgeous. When I asked what they wanted to happen with the quilt, I was told to send it to the mother of the patient who'd died so it could be buried with him. This was a group of patients who were locked up due to not having their medical condition treated in the community, posing a very real risk of disease transmission, not locked up cause they're alzheimer's or mentally ill. And this was what they wanted to do to honor one of their own.