We took a family trip to Venice a few years ago for May Half term week and we all loved it - even though there were horrendous downpours and our ice creams got soaked.
We stayed in an apartment near one of the few children's playspaces and our son who was 13 spent some time each evening playing five a side soccer with local university students from all over the world. It was great to hear the kids practice their little smatterings of foreign languages.
My daughter, who was 10 at the time, insisted on going for the breakfast rolls every morning, except one day she forgot the word for little and ended up with seven loaves of bread.
I would love to go back - we were lucky enough to see the Vogalonga (?) the morning after we arrived, with hundreds of boats of all shapes and sizes rowing around the islands for hours. There were so many people arriving at the same time as us that the airport cash machines were empty, but we didn't feel that it was overpoweringly overcrowded. It is definitely on my list of places to visit again, probably not in August though.
I have family on the isle of wight, which is not quite Venice (!) but similarly has influxes of tourists, but you accept them as part of the local economy. As long as the tourist needs don't drive out the people who live there all year round, which can happen e.g. if house prices get driven up - I expect that happens in Venice too.