Crikey, Millie, I think this lady takes snobbery to a new level.
I would have smiled sweetly, said yes to her castoffs, and put them onfreecycle or taken to charity shop, etc.
Fair enough, if she only wants new stuff for her own dd. But not intending to pass items on to 'poor folk in the third world', or however she wants to think of those less fortunate than herself, that's what bothers me. Such an enormous waste.
I am giving away loads of baby clothes right now (stuff people gave me). I may try to flog some, The next nicest stuff goes to charity shops, the good enough stuff goes on freecycle (I have a rag pile too).
My mother made all her children's clothes, too, until I was 7 or 10 or so. I think that's what most women did until the 1970s. I can remember Mom was kind of sad when she had to stop because she realised she could buy my clothes cheaper than she could make them. My mom made her own wedding dresses, too.