The things about having customers design quilts for you and paying you peanuts for your time doesn't have to be an issue, the way I see it.
First, you should always be charging what your time is worth. Being underpaid and overworked would absolutely lead to hating it in no time flat! There was a thread recently where some lady was doing that for her quilt guild...$40 to LA a queen sized quilt, etc. Yikes! No wonder she quit!
One of the most important things in a business, especially like this, is to decide what your limits are and to only accept business within those limits. You don't HAVE to accept everyone who wants your business! If I'm in the business of making sundresses, there's no way I would take on a client who wanted me to make them an evening or wedding gown and then wanted to design it themselves to boot, especially if they had no knowledge of fabric or design. The same would hold true in quilting, for me at least. Ditto for paying me for my time. I would never allow someone to just reimburse me for materials plus "a little extra for my time", unless it was a one-time deal and I was the one who suggested it.
The people who get mad and huffy about my prices and requirements? I don't want them as customers anyway! Think about it. :)
Now I will agree wholeheartedly that with deadlines and everything else that your time is no longer your own. But the same would be true for ANY sole proprietorship type of business. And not everyone wants to deal with that- and it's a very valid point! ;)