Sometimes perspective is everything. I've been thinking about this since I first read it this morning and I can see where you're coming from but I wonder if your MIL thinks you're rude because
I don't go around asking for her paintings, nor do I hold her artwork up to my walls to see how good it looks there. I don't ask for her stuff, period. If she wants to give it to me, I gladly accept it, but I don't expect it of her. And I often offer to pay her.
I think most people, most of the time, are well intentioned. On the other hand you know your MIL and people you talk to and I don't and there are always people around who will make digs no matter what. From my POV, if I give something to someone and they offer to pay for it, it's like a slap in the face. When I give a gift I expect nothing in return. I have not, however, walked in your shoes and if I did I might just have to agree 100%.
As for people saying, "That's too much!" Finding out what it would cost to own a hand-made item may be something of a shock. Lots of us couldn't afford custom-made anything. Rather than saying, "Oh, I wish I could afford it," they make some other remark to save face, maybe. I don't know these people and I could be completely wrong.
As a MIL myself I try to let my SIL know that I appreciate him, that he is a good father, that he makes my DD smile. This reminds me that I need to make the effort again soon. Thank you for that.