I would be mad too. I have bought fabric for 3 quilts to give as Christmas gifts this year. I usually spend about $50 per person for gifts but these are going to cost me way more than that! I bought quality fabric, thread, etc because I want my hard work to last.
Best revenge? Never, ever, give her something you hand-crafted. It would not be appreciated and you can use your valuable time and talent to create something for someone that would cherish the love you put into it.