The problem is not with "bad" countries.
The problem is when a large amount of abusive traffic comes from a handful of countries, it's technically easier to block entire IP ranges and ASNs, than to filter and allow the small amount of well-behaved clients while blocking the rest. This is especially the case when the company has no commercial presence in these countries.
To be fair, the scenario you describe where countries are blocked purely out of political or personal reasons does exist, and I agree that it's morally wrong, even if it's the prerogative of any individual or company who they want to provide service to. But in my experience the blocking is usually motivated by abuse.