There is no way of doing this that will satisfy everyone. If you give priority to siblings you get complaints from people who live close to the school but didn't get in because of people living further away with siblings already at the school. The objections are strongest where they feel families have moved into the area, got their eldest into the school then moved out of the area but got their younger children in on sibling priority.
On the other hand, if you give priority on distance first people with siblings complain that they didn't get in leaving them with problems getting their children to and from school.
I presume your school's priority order places siblings outside the parish/catchment area as lower priority than children within the parish/catchment area. I would imagine they prioritise siblings within the parish/catchment area over other children in the area. That is not uncommon for faith schools. From your comments I presume you live outside the parish/catchment area.
Equal preference (as the current system is known) has been compulsory for a number of years now. It isn't really that new.
I believe it is much better for parents than the "first preference first" system that many schools and LAs used to use. Under that system parents were often left with very difficult choices. Imagine parents who want their child to go to school A, which is a popular school. Their second choice is school B, also a popular school and where they have a much better chance of getting in. Under first preference first it may be that both schools fill up with children naming it as first preference. So if they put school A first and don't get in they won't get in to school B either. On the other hand if they put school B first they will probably get in but they will miss out on the possibility of getting in to school A. This means that, under first preference first, you should put a school where you stand a good chance of getting in as your first choice. If there is a school you really want for your child but which is a long shot in terms of getting a place, naming it as your first choice is a huge risk which may end up with your child missing out on all of your choices.
Under equal preference, on the other hand, the parents can safely name school A as their first choice and school B as their second. They will then get a place at school A if one is available and, if not, they will still get in to school B.
Your argument is that someone who puts your Catholic school as their second choice didn't really want it. It is true that this school wasn't their first choice but they decided that this was the school they want their child to go to if there was no place available at their first choice. So they prefer this school to all other schools bar one. I am sure that many of them would disagree with your suggestion that they didn't really want it. Indeed, for the reasons I have given above, it is quite likely that many of them would have named this school as their first preference if we were still using first preference first.
If we return to first preference first we will be back to the situation where, for many parents, the only choice that really makes any difference is the first preference. If their child doesn't get into the first preference school they probably won't get a place at any of their other preferences either. With equal preference, on the other hand, most parents get their child into one of their preferences.