My parents paid for me and my sister to go on holiday with them when I was at uni. They wanted our company, could afford it, so I don't think there's anything wrong with that.
Soon after we graduated we decided to move in with our respective boyfriends (now husbands). We had low paid jobs and crummy rented flats. We no longer went on family holidays paid for by our parents because we were independent adults, with our own budget to stick to, which meant that dh and I didn't actually have a holiday of any sort for a couple of years because we couldn't afford it. It's called making your own way in the world and We were both absolutely fine with that. We also reckoned that it was about time that mum and dad treated themselves to some more exotic holidays than they had been going on for the past few years, due to forking out for us. So they went on a few long-haul trips and really enjoyed themselves. Which is absolutely as it should be.
Dh and I had a few years of couples holidays the more we began to earn and then when dsis and I had our first child ages about 30 someone came up with the idea of a big family holiday if everyone wanted to come. So dsis and I and our dh's and babies, and our mum and dad if they wanted to come. Which they did, and we split the cost of the cottage in Devon 3 ways. I think dad insisted on paying for the main food shop while we were down there, but each party generally paid their way. We have had family holidays in that way ever since until recently when people's differing opinions about the type or location of holidays they wanted meant we all went separately.
Dad has insisted on treating us all to the odd weekend in this country in a cottage because he enjoys it and because he knows that we wouldn't be able to afford a big extended family weekend somewhere AS WELL AS our own immediate family holiday. Which is fair enough I think.
But the idea that there are 35 year olds with decent jobs thinking it perfectly acceptable for their parents to pay out for a trip abroad and all food and drink there is outrageous to me. Parents need to make it clear from the outset whether is it a one-off treat with the location chosen and paid for by them, or if it is a jointly chosen and agreed on holiday with costs split equally.
With a 20 year old: if they are making an effort to do something with their life instead of sitting round not earning or learning, then I think it's fair enough to want to offer to pay for a holiday for them if they want their company on it. I don't see it as a "family holiday" by that age - as a parent I would no longer be choosing a holiday based on their particular wants or needs. I'd book where I wanted to go and seeing if my grown up child WANTED to come there with us.
A 20 year old who sat round doing feck all except buy Lord Of The Rings tat would not be invited by me, I'm afraid.