Ember you asked a question, you asked were you a selfish and awful parent?
I've answered, in my opinion you are. Sorry but don't ask if you don't want the answer.
You're first post said nothing about the benefits for your two year old, it was we can have time with eldest and we can relax by the pool. Later when people have their opinions you then came l wit she wouldn't enjoy it anyway.
Had you first said I think she'd prefer it with gran that may have made a slight difference that she'd been considered. But it was all about an easier time for you and DH. Your DH thought it was great, yes because he gets to relax by the pool.
I think gran is great, works full time 12 hours a day and uses her holiday to spend with your child. I honestly think you and OH should be doing the same.
I know you don't like mine or anyone else's opinion about your parenting, but you did ask...
Ultimately I feel very sad that your daughter won't have precious family holiday time with her parents and siblings.
I know how that feels and was trying to re you for the other side of the fence!
Enjoy your holiday.