I've seen Christmas stockings made from old quilts. It didn't matter that the colors weren't the traditional Christmas colors. If they're too worn to salvage even parts of them, I like the idea of burning them. I might keep a small piece as a remembrance, but maybe cutting them up even seems disrespectful to you. If so, I think a funeral pyre is a fine idea.
My husband never liked the idea of throwing old cut flowers into the garbage. He said they provided too much beauty and pleasure to end up in a landfill. We always throw them into a midden in our backyard so that they can go back into the soil. I think a quilt deserves similar respectful treatment.