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They say that they aren't baptizing them into the church, just giving them the opportunity to, er, join the LDS temple of their choosing in heaven.
Anyway, almost anybody who's done genealogical research runs into these. They're not all that big a deal, really, at least the way I see it. But then, I tend not to believe my dead ancestors are affected by much more than worms.
If some church I don't believe in wants to pray for my dead soul or whatever, fine by me. It's almost a compliment- we like you enough to want to have you join our church, even though you're already dead.
I think it's religious bigotry. Remember when they baptized everyone who died in the Holocaust? FWIW, I've known since I was 9 that it wasn't only Jews who were murdered then.