Before a baby is born, it's not yet a person making up the country, just as an citizenship applicant isn't yet either. The latter is easier to evaluate for "goodness", but I don't think that's the reason people tolerate all babies to readily. It's probably because the baby's parents are citizens and feel like having a citizen baby is their right. What if an immigrant's citizen spouse felt like having their partner be a citizen was a right too? I guess those people are too much of a minority to affect immigration laws. So yea, it's to serve the existing citizens but still arbitrary.