I've been quilting about 15 years now and about 95% of my quilts are backed with muslin. I just love the feel of it and when I gift a lap quilt, (which is most of them), I honestly get so many compliments about how nice the quilt feels against their skin when it's backed with muslin. The few I've backed with regular cotton quilting fabric, I've not heard this comment at all.
So it's a personal choice, no right or wrong, but I love using muslin as a backing and clearly folks love receiving quilts backed with muslin.
Oh, and I always use the best muslin I can get my hands on.