Elaine -
I'm going to wade in with a guy's perspective here. It was still on the bed, and he elected not to tell you. I'm guessing he was sick about it also and didn't want to hurt your feelings by asking for a repair, but it still meant enough to him to continue using it. And, he used it even though it's usefulness and durability were compromised. Remember the best-loved quilts will not end up in a museum; they will end their lives threadbare and finally thrown away when they literally fall apart in the washer.
Once you give a gift, it isn't yours anymore. If the recipient loves it and uses it, that's a great compliment to you. If they sell it in the garage sale or pack it in the attic, well, you made a legitimate effort and they didn't like the gift as much as you thought. It's the thought that counts, right?
Try to think of it this way: What if he came to you in ten years and said "Mom, I love this quilt, but it's been on the bed so long and been washed so many times the stuffing is coming out. What should I do now? Could you make me another one?" I'm sure your heart would melt and you'd rush to the fabric store! This one just got "worn out" earlier than either of you expected. Now that he knows you know about the holes, he may ask for a repair. If he does just smile and do the best you can knowing he still wants to use the quilt.
Sorry if this sounds preachy, but I have relatives who don't take care of things either. I also have a relative who is mortally insulted if she gives me something and I don't use/wear it the way she thinks I should. So believe me when I tell you I understand both sides of this equation. You have the advantage because you can get your joy from the creating and giving.
Darren