Because it's art, your art, and this is what you do. That's why I would make them. A house is so cozy with lots of quilted art works around, and I really like the look. Perhaps the mother was just thinking about how much extra wash she would do because kids tend to mess things up. I wouldn't give mug rugs to her kids, because she doesn't see the point and would probably just put them away. Try something else, such as a quilted can holder to keep pop cold, or little zipped bags for kids to store their "treasure" in -- something like that. Give the mug rugs to the adults to use. And please don't take what she said as an insult, or reason to wonder if you should give them to anyone. She is entitled to her own opinion, and a lot of people don't know how to use quilted products.
I offered to make my sister a quilt, and she was lukewarm about it. Didn't even care what kind I wanted to make. So I made her a nice quilt, and she's falling all over herself thanking me and telling me how beautiful it is. She thought a "quilt" was one of those cheap things you can get at Target. This was her first experience with a "real" quilt. It was so fun to watch!