There was a time that bird feeding was acceptable. I even remember there being licensed bird feed sellers placed strategically throughout the piazza. Those have been gone for quite some time, though. In short, there are too many birds that carry diseases and are destructive to nearby buildings.
Ahem...I wonder how frequently these unlicensed guys are allowed to sell feed from their vest pockets? This time it was they who were strategically placed throughout the piazza, asking for one Euro for each handful of corn.
I've never heard of fines being issued for bird feeding. (What do I know, though?) Conversely, I have read countless articles over the years of hefty fines being issued to tourists who buy the bags, fines greater than the cost of the authentic bag purchased in the company store.
I told the girls to look and chase as much as they liked...but please don't touch the birds. When I told them that the birds might poop on them, I got their attention and promise to heed my directions. As far as I'm concerned, a pigeon is not much more than a rat with wings. (Harsh...I know.)
Here is link to a (dated: 2008) article in the NYT about the reason for the ban: "Venice Bans Pigeon Feeding in St. Mark's Square."