Your point seems to be that local events are a major factor in choosing a destination, influencing everything from ambiance to costs. Now my refinement: I would say that if this is sometimes true, it is not an absolute rule; other practical constraints are often more important, especially for families.
School holidays, for example, determine the travel period long before considering a potential festival.
For us, finding a destination that fits the budget and dates is the first step, then local events are a bonus or a constraint.
If an event causes prices to rise, it just makes the destination impossible for a family on a tight budget, regardless of its interest.
The practicality and cost always take precedence.