I think your analogy to a soup kitchen is a false one. The difference between sodium and chemical packed canned soup and a homemade soup of fresh ingredients is demonstrable and real. The baby in NICU could absolutely care less is the blankie around them is the standard hospital issue or the handmade cartoon character one. Nor does the handmade blanket in any way improve the baby's health or prospects.
My own son was in the hospital for a week as a newborn and I could have cared less what the blankets looked like. IF the worst had happenned, I can't imagine that a blanket made by a stranger would have been anymore comfort as a keepsake than the little knit cap that the hospital provides.
As to foster children, I have worked with a number of them-- those that were young enough to need security objects did seem to bring those with them everywhere. If you asked them if they would like a small quilted blankie made by a stranger vs. new shoes or a hand held electronic game-- I think they would ALL choose the latter.
So, really-- I think the Project Linus is mostly for the benefit of the blanket makers. It certainly does no harm and if you enjoy doing it, great. I just don't think it provides any geniune service to those in need. And, when I look at the resources it seems to sucking up, I can imagine them deployed in ways that would give those children real benefit.
EDITED TO ADD: This is a little off topic, but something I have noticed when working with foster kids coordinating Christmas gift drives is that many people don't seem to understand what is really desired by these kids. In my experience the number one desired object is a Gameboy (or other trendy hand held electronic device). Next are FASHIONABLE pieces of clothing (that is, fashionable in their circle), like pricey shoes, jeans, etc. If you find yourself shopping for a foster child, ask for guidance from the child himself if possible. If that isn't possible, find a close proxy in age and economic status to ask.