My institution has a very tight, set schedule that relies on classes beginning and ending on certain days—many years our first day of class is actually Labor Day.
Beyond the logistical concerns, our community also had a conversation specifically about the best way to observe Martin Luther King, Jr. Day. This was before my time here, but the consensus between both faculty and concerned students was that it would be better to hold classes and have events on campus focused on MLK's legacy, rather than treating it like a vacation day. My children's schools have made a similar choice. This is also the practice for Veteran's Day and, to a lesser extent, a few other holidays.
Personally, I can appreciate the philosophy that it's better to actively celebrate these civic holidays* as an academic community, rather than celebrating mainly by sleeping in or going shopping—even if sometimes it feels like we're the only people in the state who have to work on a given day.
*Labor Day is in a rather different category, since it was initially conceived specifically as a day of rest for laborers.