~shrug~ Totally up to you, but here's my take on it.

If you tear the quilts apart and modify them to your own taste, then they are no longer your grandmother's quilts, and IMO are no longer an heirloom that you've been given custody of. They've become your creation, albeit using the fabric that you got from taking apart a creation of your grandmother's. While the fabric may be vintage, the quilts are no longer antique/vintage.

I don't feel that we can own an heirloom...we're merely given custody of it until it's time for the next caretaker to begin their custodial period. It's like being trusted with a family museum piece.

it is YOUR choice what to do with YOUR quilts! if they would be better (re-cycled) there is no reason not to- you would still be using the vintage fabrics and possibly make an heirloom- it sounds as if they are simply utility quilts now- there is nothing wrong with doing what you want with YOUR quilts. some people would keep them as they are- and hide them away for (posterity) where someone else can come along and throw them out...or give them to goodwill-
if you re-create them - when you are gone someone may want to actually keep them

everyone has been so kind to tell their thoughts on my quilts. No one wanted these quilts-even my history loving Aunt-she couldn't see why I would want them.
So.. I haven't taken them out and looked at them for awhile-I'll do that and decide. If I change them I want to stay near the style and perhaps make wall or lap sized recreations. The fabrics themselves tell the story of life on the farm-hard work, poverty, happiness, family.
We live in Florida where quilts are bed decorations most of the time, and it would be nice to "see" more of my grandma around me.
Again thanks for all the advice.

Rosie- I would myself leave the quilts as is, because that is how your grandmother made them. I see that in how you describe the story of the farm life they tell, that this is important to you. But you need to do what makes you happy. I am in Florida too, and I tend to use low loft batting in my quilts and we use them all year long.

If you decide to take them apart and redo them, take a picture first. Then take a picture after redoing them. Frame the before and after pictures together, then when later they become quilts that you pass on to the next generation, they will be able to see where they came from. Also, be sure and label them, including the time period you think the fabrics are from. I have some of these quilts from my husband's family that I want to "redo" because, like yours, they were utilitarian and they are not in good shape. My DMIL wanted me to do something with them.