I think the morally questionable problem is this: I am highly doubtful that the original inhabitants of the islands are receiving any revenue whatsoever from the corporation which runs .IO. At least the small pacific island nation states that have hired third parties to run their ccTLD have contracts and agreements in place for a revenue share.
Why should they get any revenue from .io? The .io is an invention of the government and has nothing to do with the original inhabitants. The "original" people were removed well before .io even existed.
Might as well demand they get paid for any inventions the military makes while testing stuff out there.
And if the British hadn't done this and gave control over to the people living there 50 years ago, they wouldn't get .io either, because they wouldn't call themselves British Indian Ocean Territories. They'd have used something reflecting the name in their language.
So again, this is a "resource" purely created by the British government being there.
Maybe it's terribly unfair and bad what they've done to those peoples, but .io doesn't figure into that at all.
Edit: I suppose if they had their own nation state, they could make some money that they couldn't otherwise. But why stop at domain names (which, again, wouldn't be .io, it'd be .cx or something for Chagossians)? They can't issue passports, a potentially valuable resource, not being a sovereign nation. They can't run "tax haven" schemes, etc. Seems like getting upset over .io itself is pointless compared to all the other stuff they could do with an internationally recognized government.
.SU is actually the only former country with a TLD still delegated, and quite a few have been removed. In recent years .AN, .TP, .YU, .ZR have been phased out representing former countries.
I am similarly outraged that I haven't had any cheques from Nominet come through the post recently and as a UK tax paying citizen I am outraged at this oversight.
