1. Going on a vacation shows you are competent. It is proof that you are good at your job because you can manage and plan enough to free up some time in your schedule--and not leave a festering mess in your absence. Not being able to take a vacation for years shows that you and your team are so out of control that you can't even be gone for a week.
2. No one is impressed if you don't. Bragging that you have not had a vacation in years or that you have maxed out on vacation days is not scoring points with anyone. If you think your company or your team see it as a super-keen work-ethic, and admires you for it--they don't.
3. Your team is motivated. When you show by example that you support and allow people to have a life, they will be more motivated to contribute. As long as you don't send them email every day while you are "on vacation"! Set the expectation you will be generally out of touch. If you can't stand to let go entirely, arrange 1-2 scheduled check-in points, but don't just go somewhere else and keep working.
4. Your team gets more productive. When you go away, you give your team a break from doing and worrying about all the things you throw in their way when they are trying to get their work done. After about 2 weeks, they will miss you and need you again, but in the mean time, their productivity will actually go up.
5. Being unavailable helps people develop. Being unreachable for periods of time is actually a very effective technique for developing people. It forces them to step up. If they think they can reach you at all times, they will never bother to think bigger, learn, and take risks--they'll just ask you. Just be careful not to un-do everything they did in your absence just because it was different than the way you would have done it.
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6. You will be more productive. If you step away from the day to day chaos and give your back-of-mind processes a chance to chew on things while you are in a good (or at least different) mood, you'll think new thoughts. You will solve problems you might not solve if you stay fully engaged at all times.
7. You will prioritize better. Stepping away helps make it clear that some of the things that you thought were vitally important before your vacation don't actually need to get done after all. When you step away, the difference becomes more clear. The most strategic things re-assert themselves and all the clutter drops several notches in volume.
8. You let other people be "important." If you refuse to leave ever, you are sending the message that you are the only important person. Giving others the chance to be in charge, make decisions, speak on your behalf and solve problems sends the message that you have confidence in your team. This builds your credibility with your team, your peers, and your management more than pretending that the business can't live without you for a moment. (Which doesn't really build your credibility at all.)
9. Your company benefits. Your company prefers people who enjoy their life because they have more positive energy for their work. They are more effective and more productive. People who have interests outside of work also deal with pressures and disappointments in the workplace with more resilience and confidence.
10. You need a break, whether you know it or not!
Finally, if something comes up in your business that you really can't avoid handling personally, and you need to cancel your vacation, reschedule another one while you are canceling. This will minimize resentment and disappointment, give you something to look forward to--and ensure you don't get too full of your self-importance, and go too long without a vacation.
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