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"...It wouldn't have anything to do with the fact that a C-section is a much more expensive procedure than a vaginal borth now would it? .."

The reason was almost certainly the prevention of possible lawsuits against the doctor and/or the hospital. When I did my maternity training (I'm an RN), I found out it was fairly common to get risky mothers into minor distress using drugs that speed delivery, to get medical reasons to perform a C-section. Two or three "late decels" (baby's pulse slows at the end of a contraction) and it's c-section city. They are MUCH less risky than vaginal deliveries, and reduce the possible legal ramifications when they are medically necessary. I'd bet money that the docs and hospital exaggerated the case, because they didn't want to risk liability. Also, if they can medically justify it, insurance has to pay for it.