Lots of advice already on not taking things personally... so I'll skip that
Insulting or no, the idea that something "looks handmade" is always a compliment in my book. In our consumer world, where the buying of things is one of the only ways to survive (even food; unless you live in the country and are dedicated, you have to buy your food, and all it's packaging, and all it's extra ingredients, and all it's etc etc etc), having something hand made is a real treat.
Besides, unless she creates her own garmets as well (wheter it be sewing or knitting or whatever), it's even more the compliment, whether or not she meant it that way. 'Cause if she doesn't create her own garmets, she's pointing out something wonderful that you can do that she can't (neener, neener).
Also, some of the coolest things I've EVER seen someone wear both were, and looked, hand made. Example: a skirt a friend of mine had made by buying all the men's ties she could get at a thrift store, then sewing them along their long side (wide part at the bottom, narrow part at the top). She trimed the "fabric" at the point where it would go around her waist/hips and threw in a closure by not sewing one of the tie join seams to the top and putting in ties or buttons or something. It created a flattering, upward-tapering skirt that came to about her knees, with all the tie points giving the edge a really cool zig-zaggy hem. Some of the ugliest ties ended up being some of the coolest parts of the skirt