I don't see why kids absolutely have to have expensive holidays abroad. If parents take their kids out during term-time to jet off somewhere exotic, I have no issues with the fine.
However, I do think unlimited compassionate leave should be available - time to spend with very ill relatives, funerals, that sort of thing. If anyone gets fined for spending time with their grandfather before he passes away from a nasty illness, that would be all kinds of wrong.
I also think if a child has a traumatic incident at school, like being bullied, and the parent feels that the child needs a mental health day, that should also be OK. Otherwise the family are getting punished twice by the school - once for failing the child and second for the fine.
I think what it comes down to is that headteachers need to be empowered to use discretion. Some people are clearly chancers, others are just going through a difficult time.