If the return flight was booked as an adult and 2 infants you would have thought that the confirmation e-mail would emphasise the restrictions in such cases - never having been in that position it could be that it does of course.
Like others I don't see this as PC gone mad, but a failure in the system that allowed the problem to get any further than the check in desk. It is fairly well known that not all car seats are suitable for use on an aircraft seat, so a quick check at the check in desk (or bag drop if they did it online) to ensure compliance would have saved the trouble, and depending on when they checked in may even have given them chance to get a different seat before the original flight left.