The price was one of the reasons quilts of the period were made from scraps of every sort. There was no such thing as "old clothes" or "donating" clothing. Perfect example are the Quilts of Gees Bend. These ladies couldn't believe the fuss made over their quilts when they were "discovered". To them they were sewing old pieces of cloth together to keep them warm during the winter.
When people did pay 25.00 a yard for fabric, you can bet it was for a very special occasion -weddings, curtains, drapes, etc.