It's not really my style personally, I do use things as a measure or consequence of good and bad choices but at the end of the day I wouldn't cancel or withold presents so I would not use that as the measure or consequence. I hadn't really thought about it that much until we met up with brother and SIL at Christmas and heard it a lot! I think the reason I don't personally see it as a great strategy is that over the course of using that threat (a period of 3-4 weeks I assume?) there is going to be lots of times when you get a 'yes santa is coming' and lots of times when you get to the 'no santa is not coming because of X behavior' and I think it is a bit......confusing and a bit too long term. So did santa come because of the 9 good things or did the 11 bad things just get forgotten? I tend to use much more short term and more tangible consequences and things that I can and will follow through with. As for brother and SIL I know they are kind of struggling with behavior stuff at the moment and their threats were just a symptom of that struggle.

As for the story of cancelling christmas......I don't know, the kids behavior does sound pretty bloody rotten but I'm guessing (and the article hints) that this wasn't the first incident of it's kind. I suspect along the way there has been some ummm questionable work on the 'helping children to make good choices' front that landed the family in this place. To me the story has a touch of the parents taking a certain path with their parenting (or not taking a path, just letting things happen however) that has enabled the children to make some pretty crap decisions, then opening a can of whoopass on them when they do. Kind of setting them on a path that is going to have a bad outcome, then punishing them pretty harshly when that bad outcome inevitably arrives.
I mean I think both parents and children need to take some responsibility for the mess, but the parents need to be making sure they are holding the reigns and steering in an OK direction. Am I being a bit simplistic about it?