Providing a refund in any event, regardless of the cause of the cancellation, of course makes perfect sense. That's what the law is in the European Union and the U.S.
However, if the airline cancels the flight for reasons that are not extraordinary, they also have to compensate passengers for their time and their inconvenience, because, after all, that is also a cost to the economy. When 200 people don't reach their destination on time, that has a productivity value that has to be paid for by the airline.