That's a wonderful compliment to on behalf of the family. Talk about recognizing the value of your work!
And while I also prefer baby quilts being used until they disintegrate, it's a lot better than being put away out of sight, never mentioned again or used for the dog (I've seen these things happen to friends - they were devastated).
Let them enjoy the quilt however they want. Maybe there will be another baby in the future and they'll take it off the wall then.
On another note: ALIEN INVASIONS!!!
That was one of the coolest kids fabric lines I've ever seen. Great graphics, bright colors on black, fabulous coordinating fabrics. I'm using the stripe for a pieced back on a baby quilt I'm making right now.