I use more than a 1/2" seam allowance for the edges.
Yes, you do miss a small hunk out of the corners but when you sew the blocks together it isn't really noticed. It is only seen at the outer corners of the quilt.
Personally, I love my flannel raggedy quilt. I did use warm & natural batting, but could have omitted it if I wanted. I live in Phoenix, AZ and love that it is so soft and cuddly.
ali