Currently, if you quarry and replace with dirt (or whatever else you configure it to), the replacement blocks are generated for free out of nothingness. Can an option be added that would require that the player feeds replacement blocks to the quarry?

That would be a bit hard to do. How would the blocks be fed into the builder? It needs a chest for output already.

Three ways come to mind:

1. Have it "magically" pull from another machine, the way that storage scanners pull from chests and screen controllers power screens.
2. Make the output chest also be used for the replacement input. This would slightly complicate automating item removal from the chest, though. (Although with XNet, this would still be easy to do.)
3. Just add another side that needs a chest attached to it and use it for the input.

Personally also I don't see the need for this? It is not as if the free block is worth anything is it?

One concern is that in some modpacks, it's hard to get pretty much any blocks, even one like dirt and cobble. Also, you can currently exploit this to get infinite amounts of whatever it is, although fixing #891 would put a stop to that.

Actually this was in another mod called progressive automation (no longer updated, but looking for someone to carry on... wink wink), and I also liked the feature of replacement, that mod had a miner block which you had to not only provide cobble to replace a block it mines in the GUI, but also the tool (pickaxe) you were going to use to mine, this way the result are based on the quality of the tool it uses to work and as long you have cobble on the GUI it works (it only accepted 64 cobble in the slot), since this was a little bit cumbersome, you could put an upgrade, which was a cobble generator upgrade, where you had to craft like a card, with a bucket of lava and a bucket of water, and some other things. and you put it on the machine and it generated free cobblestone for you replacements, so the upgrade kept the cobble slot always filled, and you could even use it to pick some free cobblestone if needed.

What I liked the most was the tool getting used, so you could put like enchanted tools, and it would mine faster, better, wield more stuff, etc etc, when the tool had 1 durability the block would put it on the GUI output area (3x3 area), and if there was no space it would stop. You could pipe in, tools, and pipe out items, and it could use RF or just plain coal as fuel, really handy.

It also had a tree chopper block which I miss the most.... I miss you tree chopper... sniff...