Yeah, I can't get behind either of the parties here. Nobody wins and the poor baby loses.
The restaurant owner doesn't get any points for expecting a toddler to behave better than she was able to. Plus, it appears she was yelling AT the baby, and using profanity, according to some accounts. Even if she wasn't, she lost her cool and scared a baby. Jeez, lady, maybe try your inside voice first?
At the same time, the parents should have been able to manage that situation, especially with 2 of them. I've been taking kids to restaurants for nearly 20 years, and some really, really awful things* have happened, but we dealt with it all and didn't make it everyone else's problem.
*Oh Sweet Horus, such awful things...