I think LV is one of the only types of "fabric" bags that I'd spend money on. If you've ever felt one, the canvas is actually coated, and I love the way it feels and I love how durable and great they are. My Damier Speedy is one of my favorite bags, it's fabulous.
As for plain cloth bags, I think they serve their purpose, but I wouldn't spend a lot of money on them. Some are nice because they're washable, and I wouldn't tote library books around in a nice bag, or bring a nice bag to the beach or on a boat, you know? As much as I love my nice leather bags, I can appreciate other materials for what they are.