So let me get this straight...
When ATOL membership is applied for/renewed it provides a handy health-check on the financial health of the organisation. I've no idea if that health-check is over-zealous.
As part of the shenanigans around Monarch's renewal it seems it was not passing the health-check. The action of failing to renew the membership would itself be a fatal financial blow to the company in terms of lost future bookings. Maybe that was justified I don't know.
But despite all the publicity and common sense, a small minoritybooked without having ATOL airline failure protection insurance for their flight. HM Gov decided to repatriate them anyway on the basis they would try to hit the insurance and/or card companies for the cost.
So the airline failed because it couldn't renew its membership of an insurance scheme that the government then said "ah don't worry about that".
Should Mr & Mrs Holidaymaker from Huddersfield be left high and dry because they didn't have insurance. Erm.. yes, that's how insurance works. If not, surely the rest of us who have paid the premiums in our flight prices have been missold the need for the policy and should have the charges refunded? (No, I don't really think that's going to happen
)