I used to work as a Technology educator for the Hawaii Department of Education, and here, while it varies from school to school, vacations are generally discouraged during the school year. Some schools choose to put an absenteeism cap while most others apply a homework policy. As a rule of thumb, the higher the grade level, the more severe any possible repercussions may be.
At the middle school I was working at, family vacations were allowed during the school term, albeit unexcused. Teachers have no obligation to provide makeup work for any unexcused absentee days, thus, including family vacations. This isn't to say that teachers usually did not provide makeup work, as most would based on student merit.
At the high school located within the same district, the absenteeism cap strategy is used, where if you were to miss a particular class seven times, unexcused, you would fail the class. This policy actually allowed a student to miss about two weeks of class, simply because you would never usually be attending every class- every day. Excuses can be dealt at the school's/district's discretion. If an effort to make such a trip beneficial to the student's education is made, generally an exception will be made, and the absence of a student becomes excused for the day he or she misses.
My suggestion is to prepare another presentation for the principal, outlining several educational opportunities for your kids during the trip. AK and Epcot provide wonderful opportunities for such, especially in the lower grade levels. If the principal does not want to hear it, take it to your school board. I'm more than willing to bet one will take it.
Another strategy that you could try is to homeschool your children for the period of your vacation. Most districts make this an easy process, simply by signing a single form. Upon your return, inform the school that your intent to homeschool your children was all for not, and to have them be put back on the rolls. I wouldn't suggest this except in a worst case scenario, but it should do the trick.
In any case, I would still pull your kids and head down to WDW, so long as it wouldn't be entirely detrimental to their education. The school system and this principal you have to deal with are not the stewards of your children, you and your spouse alone are.
If they persist, contact an attorney. No school has jurisdiction over a child.