I would not toss it.....usually you can find a use for it or give it away to someone who can. I would not mix it in with the good fabric because you don't want to end up with a quilt where a few pieces disintegrate....one of my first quilts was made mainly of good fabric but I needed a purple that I only could find in poor quality fabric....went ahead and used it anyway....a few years later most of the quilt was still good except for that cheap fabric....it had faded to a grey and was very thin and started to just crumble....the rest of the quilt was still very useable on my queen bed.....Our church group uses all sorts of fabric....and while a lot of it is not the best quality....the quilts' are given to folks who otherwise would not have a quilt....While in a perfect world....we would only use the best fabric for donation quilts.....but the realty is that we would not be able to make as many. I sometimes make quilt covers for my car or my couch as I let my dog up on that....when it gets old...no loss...just toss it and make another one. Teachers may also want it for class projects....or youth groups....you could make it into gift bags...