I agree with you. one should not dictate where the fabric comes from as long as it meets the quality standards of the organization where the finished quilts are going. I was fortunate to be able to get fabric from one of the major manufacturers before they closed their warehouse near here and at a very good price. So I loaded up for the future.
I have been using it for my own charity quilts and sharing with many here on the board. It is not all LQS quality but certainly good enough for the chairity quilts (do you read into this big box store). Although they also had the LQS quality as well. If I were you I would ask why they specify the certain stores. There may be something underfoot going on there. On the other hand why pay $12.00 per yd for fabric that is going to be dragged around on a dirty floor. The other gets just as dirty and lasts just as long. One time I sent a box to a quild in South Florida and there happened to be some blends in the box. The guild would only pay shipping for the portion that was 100% cotton. What stuck up people. Who did they think the quilts went to in South Florida.