Sorry for your loss. I never hatch any thing myself before, but had some hatches by mother hens in the remote past. Just finished making a homemade incubator, going to have eggs in a few weeks for 1st hatch. As a physician I just dont think bacterial infection is the main culprit here. In nature, mother hens dont really sterilize her nests. Sometimes you hear success stories where someone thought she had lost her hen when later discovers the mother hen coming home with several chicks she incubated in the dirty corner somewhere in the back. There are numerous types of bacteria in the dirt as we know. The egg shell is covered by an antimicrobial membrane for this very reason. If the chick was infected inside the egg, then I would expect it does not has any strength to pip in the first place. The time of pipping to the time of death just seems too quick for an infection to take place, unless the chick is hemorrhaging and gets bacteremia (bacteria in the blood stream) which I dont think is in this case. Humidity and drowning sounds more reasonable here, but I am not an expert. I wish we have a Vet in this forum to shed some light in this, so you or someone else dont have to go through this again in the future. Best of luck.
