Personally I keep all well-loved quilts. I have the one that was on my grandma and grandpa's bed every day of the year. Some of the blocks are so worn that there's just a tiny "border" of the original block left. I wouldn't give it up for anything. You or your daughter should keep it for your granddaughter for when she'd older. When she's expecting her first child, wrap it up along with a new quilt and give it to her. There's always something else that can be downsized other than a small quilt. She'd be trading a treasure for a tiny amount of space.
Ah ha, it worked. I finally figured out how to put up an avatar and this is the first time it came up. YEA!!!!