The meaning is pretty obvious in context. Ps 137 is a lament for Jerusalem after the Babylonians have invaded and destroyed it. Verses 7-9 make it explicit: 7 Remember, LORD, what the Edomites did on the day Jerusalem fell. “Tear it down,” they cried, “tear it down to its foundations!” 8 Daughter Babylon, doomed to destruction, happy is the one who repays you according to what you have done to us. 9 Happy is the one who seizes your infants and dashes them against the rocks. This is sheer gloating on the part of the psalmist. Whoever overthrows Babylon is someone the author wants to buy a beer! (Put another way, that person is someone really popular with the author.) Whoever wrote this really hated the Babylonians, and would love to kill their children. Is this "right?" Remember, this is a psalm - an ancient song of the Hebrews. I suspect many a future scholar will puzzle over, say, the misogynistic lyrics of Eminem or many like- minded rappers. Psalms express the feelings of the writer, NOT THEOLOGICAL RULES FOR YOUR BEHAVIOR. (Although, it is often argued that the feelings reflected in the Psalms should be that of a mature Christian.) Note also, there is nothing that says "You should bash a baby against a rock." Doesn't fit with the text or the nature of God. It would be a misreading of the text, which actually proves the point there are "rules" for reading the text. So, why is it in Scripture? Who knows. 'Could be that God desired to illustrate that the Exiles had learned their lesson about spurning God's good gifts in Jerusalem, could just be that people agreed with the sentiment. For a person who doesn't believe the Bible is a "real" book, this verse is actually a pretty good arguement. If the Bible were merely the work of "men with an agenda," there doesn't seem to be a good reason to let such a genuine feeling in here. The Bible can be literal but still express itself in the language of feeling.