Their inner ear is filled with many touch-sensitive hairs so when you blow in them it probably doesn't feel too good for them.
I do agree that little kids shouldn't be left alone with dogs though, even if a dog has never had a bite incident before, I'm sure you'd agree that its best leave it that way so better take precautions.
On the other hand, this serves you a good purpose. You know that your pooch doesn't like to blown on, so make sure to warn others about that. Remember, always be an advocate for your dog.