I think both backslash escapes and nested quotes should be allowed.
I agree with @jgm on backslash escapes, but I do not think allowing them and other quote types removes “motivation for allowing nested quotes”.
Using nested quotes is probably the most natural and easy way to write titles with quotes. It also has greater readability than using backslash escapes or " (but, I concede, less than using double and single quotation marks – e.g., "Title with 'quotes' inside", 'Title with "quotes" inside').
Nested quotes are easy to read and easy to write. They are in line with the philosophy of Markdown. It is a mistake to disallow them.