Yes it's supply and demand, but it is at an extreme scale and bloomin annoying for anyone, not just those with kids. People who need to travel during school holiday seasons (who aren't going on a holiday) get stitched up as well with the pricing.
I'm a parent and it annoys me. I haven't been on a foreign holiday since 2007 as I haven't been able to afford it. Fine. This year we want to but I absolutely refuse to do it during school holidays. It's not just the pricing being up to 4 times higher, it's the over crowding of nice places ruined by pikey brits. ;o)
But seriously, I'll be taking them out of school. At our school if we keep to only 5 days there's no fine, so Saturday to Saturday is doable. Fine is significant... £50 per child per day. This could run into hundreds if you take a 2 week holiday.
In terms of the actual ethics of it, I have no issue with anyone doing it. It's up to the parents if they want to prioritize a holiday over schooling. For me, holidays with families are important and valued and cherished for years. Given that they close the schools at a drop of a hat for snow/wind/rain/"teacher taining" etc these days, and that my kids do perfectly well, I know they can afford to miss a couple of weeks especially at their age. It's not going to affect their life one bit.
I get why schools fine. They don't want people to "all do it" and cause emptier schools and kids to miss stuff. But in reality, the schools were never empty before fines were introduced, and missing a week is hardly the end of the world, even when doing GSCE's. You can catch up quite easily.
I think everyone should be allowed to take 2 weeks out of school per year unauthorised to account for holidays/weddings/funerals etc.
I had to write to the school to get permission to take my kids to my sisters wedding. They said it would not be allowed. Did it anyway. No fine.