dear connie, you didn't do anything stupid. you are a very kind person and took the time to help a friend. i am sorry that you were burned by your friend. that's not right. (not right is an understatement)
i think you might consider the other person's suggestion. i have also seen people selling patterns/directions online on how to make various different things. you said that you took pictures and wrote detailed instructions of all the steps. you might consider selling that. you just have to set it up one time. and the rest is just profit. (you don't have to buy fabric, spend time to sew and mail orders) you just email people a PDF file (or whatever format) when they order. that might be another way to get more customers to your store? some people like shopping for dresses, some people like to make their own dresses for their babies. i have seen it in other stores where the owner sells both the finished product and directions for people to make it themselves.
of course that is totally up to you, whatever you feel comfortable with. you created the dresses/vests. it's your creation. you should do what you want with your creations.
lots of hugs. i hope you feel better about it all. i hope you feel supported by your friends. i don't know you personally, but i support you, you sound like a really wonderful person and a wonderful friend.