IMO (and I know I'll be slated for it) kids are only in school for 39 weeks of the year and do approx 25hrs of lessons per week - IT'S NOT ENOUGH.
Taking a child out of school, voluntarily, for even 1 day, shouldn't be allowed. I did it once (for my wedding day on the very last day of the summer term 26yrs ago) and felt awful for doing it.
I think the fines are far TOO LOW. They should be set at such a level that people are actively discouraged from taking kids out of school for trips and holidays, they don't just affect the child's education, they can disrupt the whole class and put extra burden on the teachers who have a difficult enough job trying to get all the information into kids in the very limited time they have as it is.
As for feigning illness to get around avoiding paying the fines, anything more than 1 day should be recorded with a doctor and school have authority to know that the child has been seen, thus verifying validity of the sickness.
As adults who work, you're only given so much holiday time each year and sickness has to be covered by doctor's notes, so why should kids (who already do far shorter days and get loads more time off than working adults) be able to get away with having even more time off?