Is it legal to tax vacation pay at a higher rate?

It is legal, it is common --
I'm not sure if your employer used the special one-time payment chart, or if the five full days just worked out to a higher gross income than your checks have normally been this year, but it often seems to happen that vacation pay is hit harder on withholding.
The charts for regular pay periods (weekly, for example) are set up based on the idea that if you make X dollars per week, your annual income will be 52X and the tax on your tax return will be Y, so your withholding should be Y divided by 52. This works pretty well when you have a steady, predictable, single income. It begins to fail when you have commission-based pay (some weeks quite high, others low), when you have weeks off (temporary unemployment perhaps), when you have a spouse who makes a lot of money (so your joint income is higher than the charts predict), or when you have lump sum payments (and the chart calls for a percentage withholding, higher than the same income on the weekly scale would be).
You've had more withheld than you would like, but the income isn't really taxed at a higher rate -- you will end up getting the excess back when you file your tax returns next spring.