In my opinion, this can be viewed 2 ways.
If you look at this from an inside the game viewpoint, Vacation Mode is cheap and cowardly. If we are to make this seem like a realistic war game, then it doesn't make sense for Vacation Mode to exist. I mean Hector couldn't call a timeout when he was supposed to fight Achilles because he had to go to his wife's sister's baby shower. If you are unprepared to fight a battle, then you are unworthy to keep your city.
From a real world point of view, we need to keep in mind that this is just a game. On a computer. That exists virtually. There is no real fear that our cities will be pillaged and our women will be raped and enslaved. You can't always be online. If your real city were being attacked in real life while you were skiing in the Alps, you'd hear about it and cut your vacation short. I'm damn sure not going to do that with a game. I'll hit VM and enjoy my vacation.
When using it as a tactic to deter an offensive push from an opposing alliance, VM is again cheap and cowardly when seen by the alliance making that offensive push. When a number of high ranking targets hit the "chicken button" as it's been called elsewhere it makes you wonder about the caliber of enemy that you have been fighting. I understand one player being under siege, fighting off attack after attack, becoming fatigued then going VM. But when one target hits VM then the next target becomes afraid and decides they want no part of being targeted so they hit VM, then the next and the next target do the same, it takes the spirit out of the game which isn't right. On the other hand, when viewed by the person or persons using it as a tactic to confuse and frustrate their enemies, it's genius. Why not foil the plans of your enemies who have put time and effort into preparing for an operation if you are able to? Confidence and morale are a huge part of this game and if you can take steps towards harming the confidence or morale of your opponents, then you would be stupid not to take that advantage.
Overall my opinion is biased. I think taking VM when you are under attack shows weakness, and those who use it should be branded with a scarlet VM on their foreheads. On that note, I think I have an incoming attack now so I better go hit the button so that my city doesn't get taken.