I think the difference here is that I don't consider the GOH to be the mother, but actually to be the baby (who is not really there) so I can see holding a shower even if the mother can't be there.
Where is the father in all of this? It's his baby too...
To me the reason a baby shower is held is to celebrate the baby. Typically someone representing the baby is there, whether its the mother, father, or even baby. If none of the guests of honor are there, then who are you showering with love and affection? At this point it sounds like a party with a baby theme.
The thing is, the guest of honor is not
the baby. The guest of honor is the mother, and the party is held to celebrate her impending life change (to motherhood). The gifts are meant to be for her, even when they are things the baby will use. Many people very reasonably stretch all of that to include the father and his impending fatherhood, but the party really isn't for
the baby even if it's about
the baby. I agree with PastryGoddess that a shower without either parent in attendance sounds like a party with a baby theme.
In addition, going ahead with a shower when the mother-to-be is actually unhappy about it is extremely insensitive and I think a little rude (unless she's not made it clear that she isn't okay with it). It's like telling a birthday person that you'll go to a restaurant they hate to celebrate their birthday, and that's the only birthday party you're willing to have for them. The birthday person can't really stop other people from going to the hated restaurant, any more than the mother-to-be can stop the host of her shower from having the party she can't attend, but it's definitely the type of action that has relationship
Add in the worry caused by needing to be on bed rest in the hospital, and it just becomes massively more insensitive. I understand that for a party of that size with people traveling, arrangements that can't be changed might be in place, and it might cost money (or cause the loss of money) to cancel or change plans. The people involved in this shower really ought to be focused at least a little bit on supporting the mother-to-be through what is assuredly a difficult time in her life, because these are supposed to be the people who care about her the most (and if they weren't, they shouldn't have been invited to the shower). Going forward with a party she can't attend when she is upset about it is the opposite of support, no matter what her reasons for being upset.
Pregnancy is an inherently unpredictable state, so that possibility ought to be factored in to any plans that require a pregnant woman to be in a specific place at a specific time. Sometimes, it's just not possible for that to happen.