If only that was true. Sadly it isn't. Kids do get upset and emotionally affected by the decision their parents made, however explained and understood they are. Ultimately, once again, doesn't it apply to the younger children? Can they be explained that due to money, it's not possible to take everyone on holiday every year, so they will only go every other year so all can come? Surely if you believe that kids don't get damage as long as things re explained to them, younger kids won't be affected by having less total holidays then their siblings?
People have said it lots of times, but holidays are not just about the kids. Part of the reason it makes more sense for the SC to compromise in this situation, is because "their way", ie hardly ever going on holiday to wait until they can all go or worse, never going on a non UK holiday because the family can never afford to take them all out of term time, negatively impacts the whole of the family besides them. The parents, too, deserve a holiday.
I think this is one of the core reasons why people disagree on this - a fundamental difference in what people see holidays as for. To me, the people that need the holiday most, are the adults. They are the primary recipients, the children are more just going along. Their lives are already more relaxing than their parents' are. And further to that, the primary motivation for taking them is for the experiences they gain, more than the family time, as they have family time all the time anyway. That's nice too but it's not the main thing, and many kids don't see it that way either. They care about the water slides, notes notes with mum and dad. So from that perspective, it simply is preferable for all children to get good experiences, even if with different parents, than for one set of children to not get those experiences.
You've mentioned the every other year scenario a few times, and to an extent I do think that's fair enough, but I think most of us are talking about situations that are a fair bit more financially stretched than that, where waiting for every other year wouldn't result in it being affordable.