I buy good quality quilting fabric, but never pay more than $5-$6 a yard for it. There are plenty of sites where you can get top quality fabric at better prices than Joann's which I find to be high for the quality they sell. Check out
www.quiltfabriccloseouts.com for example. I've bought oodles of fabric from her at excellent prices. I watch for clearance sales and try to stock up enough for an entire quilt when I find good prices.
Like someone else said, I don't like the feel of cheap fabric. You can really tell the difference just by stroking it. A higher quality material has a smoother texture; almost like it's polished. It's usually soft and very pliable. I find the cheaper fabrics to be stiff. Personally, I believe the better quality will pay off in the long run.
If I'm going to put countless hours into making something special, I want it to last. And, yes I'm a thread snob too. I like Gutermann,Anton-Robinson or Masterpiece threads.
I did not buy expensive materials when I was first learning how to quilt though. I waited until I made something I thought would be an heirloom for my family.