I mean I could probably see being a little traumatized seeing your loved one cut open and their organs out and blood everywhere. I know I'm a pussy when it comes to that kind of stuff. I remember when my ex had a mole removed from his scalp and he asked me to be in the room because he was nervous, I went white as a ghost and ran to the bathroom and almost fainted from the sight of blood. You'd think someone who sees blood on a monthly basis would have a higher tolerance, but I guess not. I also got nauseous and almost fainted watching a video of eye surgery. My brain and stomach are no different wavelengths with this shit - my brain goes, "This is so cool! Let's watch more!" and my stomach goes, "Oh fuck no!"
Unless the guy somehow didn't understand what a C-section entailed, I seriously doubt he was "encouraged" to watch. Is it normal for spouses and/or family to witness a C-section? I would never want to see someone I care about be operated on. Sounds like he just wanted to sue the hospital and get some money. If this were the US where you can sue anyone for any reason and typically win, he would have gotten his settlement. I guess Australia isn't as lawsuit-happy.
Why would watching his wife's C-section dissolve his marriage? Sounds like things may have been rocky already and things went downhill after Junior came out because that's how things usually go when people breed. But he wanted to line his wallet a little on his way out of the marriage, and quite possibly so his wife wouldn't bleed him dry with child support payments.