One of the previous posters is correct. Infants in arms have to be paid for on international flights, and the rate is a function of the cabin flown. There would be a (significant) add/collect involved if you were to be upgraded, and the GA likely didn't want the hassle. (Nor, I expect, would you have wanted to pay it.) Now, as to why they wouldn't just upgrade your husband instead, they likely wanted to avoid any possibility of the baby being passed between cabins and/or parental visits that might disturb the other pax.

Fair? Not really. Does it make total sense, given that this was a computer-assigned op-up? To me it does. They could have handled it better, but I think op-upping somebody without a companion and infant in arms is the right thing here.