Throughout the story, the grandmother has made it clear that she is the type to judge other people quite freely. She feels that she, unlike so many others around her, is a lady, and she laments the changing times that have resulted in people becoming less trustworthy and dignified. It...
Throughout the story, the grandmother has made it clear that she is the type to judge other people quite freely. She feels that she, unlike so many others around her, is a lady, and she laments the changing times that have resulted in people becoming less trustworthy and dignified. It is telling, I think, that she never acknowledges her daughter-in-law by name, and the younger woman is only identified as the children's mother who wears slacks, as though wearing pants rather than a skirt is an egregious enough error in propriety as to stamp out all other aspects of the woman's identity.
When she initially comes into contact with the Misfit, the grandmother repeatedly insists that he is "a good man" and that he does not look like he has "common blood"; she says that she knows he comes "from nice people." It becomes clear that he realizes what her values are, that she is precisely the kind of person who would put him in jail for a crime he didn't commit, scapegoating him for society's ills because he is working-class while she is "a lady." When he tells her that he didn't know why he got sent to prison, she claims that he must have stolen something, looking to justify a system that had wronged him, and he "sneered slightly." Next, she tells him to pray. She seems to continue to blame him rather than society for the injustices he endured. The grandmother continues her attempt to manipulate him by telling him that he's "not common," which only shows her values more clearly.
Ultimately, however, when the grandmother hears the Misfit's voice nearly crack with emotion, her "head clear[s] for an instant." It is then that she reaches up to touch him, and she calls him "one of [her] babies." After he shoots her, she sits on the ground "with her legs crossed under her like a child's and her face smiling up at the cloudless sky." Because the narrator tells us that her head cleared, I interpret this as the first moment of real clarity for her. The grandmother no longer sees the differences between her and this criminal, a man she would judge so critically in any other situation, but she recognizes their shared humanity. The fact that she is described as looking like a child after death tells me that she died in a state of innocence. In the end, she's had an epiphany—she stops trying to manipulate the Misfit as she has been trying to do all along—and she simply treats him like a young man who could be one of her children. It is this real experience of emotional intimacy, I think, that compels the Misfit to react as though a "snake had bitten him" and shoot her immediately. It's the first time he's uncomfortable with her because he has likely never experienced that kind of kindness from someone of her ilk.
In short, she says this line because she is seeing clearly for the first time in her life, and this is why he says that she'd have been a good woman all along (and not just at the end) if she'd been facing death for her whole life.