No way man, to me the level of competition is what makes this tourney a top event in the smogon calender. You remember 2 years ago when asia had the championship in the bag before the finals were even played (for those of you who don't know, it was purely point based that year, no playoffs)? The entire competition fell apart at the end because there was simply no point in playing it out. The mark of a good tournament will always be how competitive it is and that includes how even the teams are.
I'll be honest, in my first year, I didn't like the thought of having a British team, a German team and then a separate European team because it seemed ironic. However, imagine a competition where you have a complete USA team (no USA East, West etc.) and think about how exciting that tourney would be. In all honesty, it would be a bore. Any excitement that comes from it would be pure David vs Goliath rather than a clash of the titans. Even if there was a team that could stand up to it, say team Australia, I'm confident that all the other teams would be blown out the water, NZ included.
To me, the awkwardness and unnaturalness of balancing teams by players rather than purely by country is a necessary 'evil' for this competition to strive.