I am speechless....
Honestly, that would be it for me. After incurring over $100 in late fees, and then showing up over 2 hours late?? I would be DONE. Notice of termination would have been ready when they (finally) showed up to pick up the child.
Bless your heart, but yes, you are being too nice. I would not allow any more lateness. Stop charging late fees, because they obviously don't care. I would let them know on Monday that the current late fees are due immediately, or care will not be provided on Tuesday.
Good heavens, how inconsiderate this family is.