Taking less vacation time is not necessarily a bad thing. For myself, not having to meet a minimum quota means I enjoy the vacations I do take more, since I take them when I need and want instead of mandatory ones. It means, as long as I'm feeling good, I can keep the momentum up.
The bigger problems is that employees didn't respect others' vacation time. Or their own, for that matter. That is a cultural problem, and a change in vacation policy won't help (much). If you want the people in your company to be happier with their time off, work on respecting it.
"The guilt of taking time off takes over, and you "just check in" or promise to be available if anything comes up."
That is, to me, a sign of an unhealthy culture. Fix that before trying yet another vacation experiment.