It's the fact that they want to charge and EXTRA £10 just to send a letter saying that they have cancelled the flight which I think is just about as low as it gets. Being honest, the insurance would probably cover the £10 as well but it's the principal of the thing.
Many companies will charge you for a letter these days from banks to doctors. If you go overdrawn at the bank without permission for example, its usually £25 or more whether you like it or not. It's just a part of the culture of rip off Britain.