I also make t-shirt quilts for others and find that most think that since they are supplying the t-shirts, that the quilt is basically very cheap to make--not to mention that some think that I work for free! I charge 9cents/sq inch--yes, that does add up--but even buying materials at wholesale,etc, it adds up. And quite frankly, these are not easy quilts to make! i find that most people will want what becomes a custom layout in order to get all the shirt logos desired on the quilt--which takes time. I do stabilize the shirts as they are easier to work with and quilt for me.
Sounds like you have done your research on the area competition. So you need to think about what YOU want to do--is lessening the materials quality ok with you? Or in anyway reducing your prices? I have decided for me that I stick to my price--it is after all a custom quilt and I can live with the potential customer telling me they will look elsewhere--actually I have given a couple of possibilities for another quilter. Or suggested they may want to to prep shirts, piece top and bring it to me for quilting and binding. But in my area, my price is typical with a couple of exceptions. One thing I suggest you NOT do is pay yourself less for labor--I just finished 3 memory quilts for an acquaintance and did not charge enough (but always stick with my estimate quote)and am kicking myself big on that!