If your MIL was going to throw it out? seems like she is no longer attached to it.
Someone else said earlier - it looks like a lot of the stitching has given out - that would be a comparatively easy fix - it's if the fabric has holes in it - that's another matter.
I think I would try to fix it as much as possible - cutting it up makes me shudder, too.
Or else just fold it up and put it in an acid-free box and put it on a shelf somewhere.