First of all, I think that in your particular case, it was a right course of action to reject the "invitation".
To answer the general question
Would it be inappropriate for someone to present a paper, for the reasons listed above?
let's look at the single reasons one by one:
Not my expertise
A somewhat valid point. You probably shouldn't be talking about something way outside of your area of expertise. However, if the topic is at least marginally connected to yours, it could also be argued that you should not enclose yourself in your personal bubble, but try to get somewhat acquainted with as many other topics as possible. In general, despite researching specific questions, an educated person should have some wide knowledge, and maybe knowing about such another topic even provides you with opportunities for expanding your own research into unforeseen directions.
My first Conference
This. In my opinion, this is the strongest point in this list. You don't have any conference experience yet, not only giving talks, but also listening to how conference talks work at all. As so often, it is advisable to start out somewhat simple, and presenting a paper you are not fully knowledgeable about yourself is probably not a good way.
I'm not an author on the paper
That is not a valid reason. As you said, people present on behalf of others all the time, and there are various reasons why the actual authors might not make it to a conference personally1.
I don't understand the paper
Acutely, that is a severe issue, though it could be said (also referring to the first point) that in that case, you just need to spend some more time trying to figure it out (and having the original authors help you understand it!). So, it is a somewhat valid reason, but given a little more time, it is an issue that can be mitigated.
A word on your statement
surely these people are knowledgable on this subject?
No. Sometimes, not at all, which is unfortunate, as like that, the Q&A session degrades into nothing but: "Next question, please." - "... ?" - "Sorry, I didn't write the paper." However, if the presenter is at least partially knowledgeable, in a way that they prepared the presentation well (together with the original authors!), it is fully acceptable if the presenter cannot provide an answer for every very specific question, as long as they can sufficiently describe the gist of the research.
1: Scheduling conflicts, visa issues, illness, or restrictive travel funds come to mind.