You're absolutely right; when they are scared of something, by petting them, or giving them affection, all you are doing is reinforcing the behavior. It's hard NOT to sometimes, but I think alot of times people do it without even realizing it. I've seen too often a dog that is stressed out, aggressive, scared, etc, and the owner is sitting there petting them saying "it's alright" when all they are doing is telling the dog what it's doing is good.
I take it on a case by case basis... Jackson isn't really scared of much, he's always been pretty well balanced, but there was one time another dog was really bothering him at the dog park (it takes ALOT to bother Jackson, he usually doesn't even care if another dog is humping him lol) so I DID pick him up because he was clearly nervous and not enjoying it. I like to coddle and love on him when he's in a calm relaxed state and not anxious, scared, or excited. Jackson is shy with new strangers, so when he's comfortable going up to them, I praise him and give him treats etc so tell him he did good!
Congrats on your new baby!