It doesn't really matter at all. The land didn't come with a .io ccTLD. It's dervived from a name the British chose, so it's not like they stole the domain name from those people, right?
Displacing settlers is a different question.
Displacing settlers is a different question.
The thing to bear in mind is this standard is used for a number of different purposes historically that has informed territories and other "non"-countries being added.
For example, it is used by postal services for routing physical mail. A lot of far flung island dependencies are coded individually because their mail wouldn't route through their mother country but through other ports.
The addition of "EU", while not a country, reflected the needs of the "EUR" currency code when the Euro was introduced (the first two letters of ISO 4217 currency codes are derived from the ISO 3166-1 standard).
The standard provides codes for such places since different law often applies in territories and on islands.
(See also: UM, TW, EH, AQ, SH, SJ, and many others.)
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.
The .IO domain would eventually be deleted, and that territory represented under the existing .MU (Mauritius) domain.
Judging by https://en.wikipedia.org/wiki/.mu I don't think the Mauritian people have much benefit from the arrangements for .MU.
I want my £10!