I'm not entirely clear on whether your objection is:
a) that Section 26 exists at all
b) that the exercise of Section 26 requires the Queen rather than the GG alone
c) neither a) nor b) and you're just unhappy with the actual decision
But I'll make a few observations in any case...
Firstly the extra senators provision is a limited one; no more than eight surplus are allowed so only a modest difference in Senate party standings can be overcome that way.
Secondly, your characterization of "ramming a Prime Minister's agenda through the legislative system." seems problematic. The Section in question was plainly designed to be a mechanism for resolving a deadlock between the House and the Senate -- and, in particular, to allow the unelected Senate to be overridden (to some extent) by a PM who has the confidence of the elected House.
Thirdly, is this really that different from most government functions carried out by the Sovereign or her viceroys? After all, we don't expect the GG to normally withhold Royal Assent from pieces of legislation.
Fourthly, how do you know the Queen didn't carefully consider the request before agreeing? Are you saying HM should have refused? I have difficulty seeing on what basis that would have occurred.
Finally, the royal prerogative does indeed deny absolute power to the PM -- but that doesn't mean she should refuse the advice of her democratically-accountable advisers just to prove a point.
As things transpired, political responsibility for the decision belonged to Mr. Mulroney -- as it should.