It would have to be so threadbare and have batting hanging out in multiple spots before I'd consider throwing it out. Even then, if it was something I held dear, I may think of a way to salvadge a piece of it like perhaps framing a part of it. If it doesn't have batting hanging out of it, I would donate it to Goodwill or Easter Seals.
I have some pretty old quilts, picked up from antique shops and auctions/estate sales. Even those that aren't in the best shape usually have a portion that can be folded to show a nicer part over an old trunk or on the back of a chair.