I don't think you're wrong that tiny pacific island nations are not stable or reliable, at this point they're all either a client state of China, the USA or Australia.

But I think it's also unfair and mean spirited to say that a country like Nauru (barely a country, IMHO, population of 12500 people) is "prostituting" itself by allowing 3rd party registrars to sell domains for a profit, since they have basically no other resource with the bird guano originated phosphate mines now being stripped clean. Would I use a Nauru domain? No. Do I go out of my way to insult them on the internet? Also no.