That's sad, and there are some instances of this happening. With those specific exceptions aside, vacation can help people recharge and maintain their sanity. They often return to work refreshed, and are more valuable to the company. Smart executives realize that.
Executives that I've worked for, will call in to the office a few times during vacation (usually letting people know ahead of time, so that peeps can prepare their questions, etc., for any situations that may have arisen). That's usually enough and people respect that. (Executives also make it clear that if a major crisis happened, the employees could call them for that, regardless.)