i would encourage you to strongly consider vbac and interviewing and consulting with other caregivers, especially midwives. it is definitely not too late to explore other options and change plans. there are many many advantages to baby and mother of vaginal birth over cesearean, and especially scheduled cesarean. for one, at 39 weeks your baby could well be 3 or more weeks from ready to come out and therefore 3 weeks premature. even one week premature can be huge. and the dates could be wrong too, which could make it more like 5 weeks early! it is always best to allow labor to start on its own, even if there is a compelling reason for a repeat c-section, which does not seem to be the case from your history. the ob who did the surgery may just say that to all women so they won't feel bad (and i doubt that he could tell that anyway unless he really got in there and stuck his hand through your vagina!). unless you have had a pelvic injury (such as being crushed in a car accident), it is unlikely that your pelvis is too small to birth a baby. there are many possible reasons why the baby didn't engage - for example, the position the baby was in (which can be helped greatly before or during labor by a good midwife who can assess and optimize the baby's position), any fears you may have had which would make it hard for your internal muscles to relax (which could be either your own fears you came into labor with, or the fears of anyone around you), any interference to the birth process (of which you most likely had plenty, since you were in the hospital). the baby's distress also could have been due to many factors, none of which would carry over and be relevant to this birth (such as, again, interference such as pitocin, epidural, fears, positioning, cord compression). the concern about uterine rupture with vbac (the "reason" doctors usually give for doing a repeat c-section) is far overblown, very rare and easily prevented. the risks to baby and mother from repeat c-section are many, serious, and far more likely to occur. vbac has been shown to be much safer for mother and baby than repeat c-section. also, in addition to the baby not being ready if the c-section is scheduled (if (s)he were ready, labor would begin), labor provides many important benefits - preparing the baby's lungs to breathe, expelling fluids, providing an amazing cocktail of hormones that facilitate the baby's physical transition, as well as enhancing bonding and breastfeeding. the mother's recovery from a vaginal birth is far easier than from a c-section, and it is much easier for the mother to really connect with her baby when she's not in pain. not to mention the very significant serious risks from this major abdominal surgery. babies born by c-section, especially scheduled, have a much harder time initiating breastfeeding (I am a lactation consultant intern and see this every day - it is so sad), and many are never able to breastfeed successfully. the sudden shocking removal of the baby from its uterine home is both physically and emotionally traumatic, with lifelong repercussions.
i repeat, it is not too late for you to learn much more about this and think about changing plans and caregivers. there is much good information online, and there are many many good midwives who are experienced with vbac (especially homebirth midwives). i think you really owe it to your baby, yourself, your husband, and your child to take the time to really learn more about the pros/cons and risks/benefits, and talk with as many experienced midwives as you need to, to make the very best decision you can for this baby's birth. i think your husband is really onto something important here, and you do have time to change your plans.