It is sad for the pups, and difficult to believe the owner had so little knowledge of the bitch's condition.
I do think, however, that the vet may have had the rights of it, particularly seeing as he had the opportunity to assess the pups' condition prior to making his decision. They were probably complications for those pups before they were born, owing to the management of the bitch, and having been born in a kennel and gone without heat, attention, or nourishment, for several hours after birth, there would surely have been little chance of their survival and a subsequent quality of life.