As soon as there were machines, people quite sensibly used them to quilt. That's what they were for, making seams. I don't do a lot of handwork, I don't applique either but I'm still a real quilter and my quilts are still "real". My machines are machine sewn, machine quilted, and designed to be machine washable.
I started reading the Elm Creek Quilt series by Jennifer Chiaverini this past year. She talks about it some in book 4 (the last one I read), The Runaway Quilt where they are discussing/the story behind some pre-Civil War quilts (two of which were machine sewn).