The prior here (A has stolen B's baby) is actually quite low. It just doesn't happen very often.
I know I'm nitpicking, but is the prior really that low in Solomon's case ? In our modern times, things like that almost never happen, but Solomon was living in Old Testament times (metaphorically speaking, seeing as the Solomon we're talking about here is just a character in a book). And the Old testament makes few legal distinctions between children and other kinds of property. Stealing them would still be a big deal, but hardly improbable.
OK, then maybe the prior is high. So what? The point is that Solomon didn't consider it. I'm not saying his test was useless or his decision was wrong. I'm saying that the word "Bayes" is being used as an applause light rather than for its meaning!
Why is Bayes' Rule useful? Most explanations of Bayes explain the how of Bayes: they take a well-posed mathematical problem and convert given numbers to desired numbers. While Bayes is useful for calculating hard-to-estimate numbers from easy-to-estimate numbers, the quantitative use of Bayes requires the qualitative use of Bayes, which is noticing that such a problem exists. When you have a hard-to-estimate number that you could figure out from easy-to-estimate numbers, then you want to use Bayes. This mental process of testing beliefs and searching for easy experiments is the heart of practical Bayesian thinking. As an example, let us examine 1 Kings 3:16-28:
Notice that Solomon explicitly identified competing hypotheses, raising them to the level of conscious attention. When each hypothesis has a personal advocate, this is easy, but it is no less important when considering other uncertainties. Often, a problem looks clearer when you branch an uncertain variable on its possible values, even if it is as simple as saying "This is either true or not true."
Solomon considers the empirical consequences of the competing hypotheses, searching for a test which will favor one hypothesis over another. When considering one hypothesis alone, it is easy to find tests which are likely if that hypothesis is true. The true mother is likely to say the child is hers; the true mother is likely to be passionate about the issue. But that's not enough; we need to also estimate how likely those results are if the hypothesis is false. The false mother is equally likely to say the child is hers, and could generate equal passion. We need a test whose results significantly depend on which hypothesis is actually true.
Witnesses or DNA tests would be more likely to support the true mother than the false mother, but they aren't available. Solomon realizes that the claimant's motivations are different, and thus putting the child in danger may cause the true mother and false mother to act differently. The test works, generates a large likelihood ratio, and now his posterior firmly favors the first claimant as the true mother.