It's ludicrous for them to be Olympic sport, although individually they're quite different cases:
1. Baseball does have a small degree of world-wide popularity (with the emphasis on the 'small', given that the 'world' series is between two American sides
), but given that none of the major league clubs give up a single player, the standard is far too low to justify their presence in the Olympic games. This in comparison to sports of greater worldwide popularity (rugby, cricket, golf), who are not in the Olympics - and part of their campaign for inclusion is that, unlike Baseball, they would guarantee that all (not none) of the elite players would be there.
2. The best softball players are at the Olympics - but it's simply not a popular enough sport wordlwide. In Australia it's an absolute minority sport (perhaps the 10th most popular at best - certainly less popular than cricket, both rugbys, soccer, tennis, b'ball, netball, swimming, aussie rules...the list goes on) - and yet apparently we're one of the three best Softball nations in the world (along with the Japs and Yanks)...showing that it's even less popular in the rest of the world, and in a big way.
Badminton and Ping-Pong have a lot better reason to be there. They command great popularity in SE Asia...I would say Ping-Pong would be about as popular in Australia as softball is...and yet worldwide we are a Ping-Pong minnow...showing a much greater worldwide relevance. The IOC makes a lot of questionable decisions; this is not one.