It has always bothered me that you could lose a nation despite doing everything you can to stop incursions. There have been games where I am everywhere and still end up losing nations I was literally stationed in. I have not played the new Xcoms by Fraxis but I have bought the first one for almost nothing. I read and heard the interface with the nations was much improved and expanded.
It was expanded but in a dumb way, you have to win the propaganda war which is quite not what I would imagine X-Com should be doing. I encourage you to mod but I strongly disagree with the idea of 'liberating countries'. It's like being angry that despite winning a battle in an aircraft or tactical combat simulator, your side is still losing the war for the reasons beyond your influence. That's a part of simulation. If a nation makes a decision to join the aliens, it is a case for other nations, not X-Com, to adress. Otherwise X-Com is overstepping its authority and seeking to gain political power. But that's just my two cents.
HOWEVER, if the mechanic to bring countries back was there, it would allow to make major conversions - like playing as Imperial Inqusition, with vastly higher authority. But that authority would mean you should get to command armies and suddenly it all becomes really, really complex as you expand the simulation.