I wouldn't make excuses for your father's behavior--that is unless he has been diagnosed with Alzheimers.
You really need to tell him in a" matter of fact" way about your feelings when he said that, and therefore, since he does not like the quilt, you will be taking it home, perhaps donating it to the VA. Make sure you tell him it had been made with love. It is better to say this out loud than to carry bitter feelings around. Why let it eat you up? He may be surprised and hopefully will think before speaking harshly next time. You be the adult even if he is not acting that way.