Do the order and thank them for the invite, but dont go to the shower. Might I suggest adding a 6in cake to the order and add that flower with the baby figure in it onto that? After all, you were going to "gift" the baby and flower to them anyway. At least if it's on the 6 in "gift cake" there will be no doubt that you did that part for free.
Also, I would like to point out that sugardugar had a good point about the cupcakes being a "hit" at the shower and the DIL stating to everyone "yeah, and they were only $3 !!" I would definitely tell the customers that you have discounted your pricing "because they are such good customers and you wanted to do something special for them for their baby shower" However, you would appreciate it if they not disclose pricing to any of their guests. That you would definitely appreciate the word of mouth advertising, but since this is not your typical pricing, you would hate to upset any new customers were they to contact you requesting $3 cupcakes and you would have to quote your regular pricing....anyway, just a suggestion.