> The question is, "Who should have to pay for [large amounts of] vacation time?"

An utterly meaningless question. In your "modern" contracts-only world, it's still the employers who pay for it, because the employees would earn the money for between-contracts "vacations" through sufficiently high contract rates.

> Also, I don't know if you've ever been involved with a small business before, but "can't afford it" in that context usually means "literally do not have that much money"

The technical term for a business incapable of paying its employees is "bankrupt". Keeping such a business running is, in many jurisdictions, a crime.

Not granting adequate time off is effectively the same as failing to pay wages, and a business that cannot do it needs to die sooner rather than later.