I have used sheets for 20 years and have no problem, and no holes. I prefer good quality cotton sheets, with a thread count of 200-250. Occasionally I use cotton sateen with the same thread count, but it's a bit slipperier, so I prefer the straight weave.
There will always be quilt police, but I have quilts I've made that have been laundered at least 50 times, and there is no trouble with them. I also buy white sheets and use them as sashing and background fabric. No trouble at all.