War is an integral part of politics. I think excessive restrictions on a states ability to wage war will lead to stagnation in the game. MPII was successful I think precisely because of the omnipresent security situations players had to play into for example.
That said, I would say that WMD's should be severely circumscribed, if not outright removed, and there should definitely be some sort of economic and diplomatic cost to waging war for some sort of occupation period to avoid excacerbating the effect of the cumulativity of conquest principle, it just shouldn't be too excessive.
Oh, and I agree the weakening of a UN is a good thing. Combined with the well balanced security/war paradigm it should make the game much more interesting and engaging, and it would more accurately reflect the anarchical state of the international order as compared to MPII's artificial imposition of a leviathanical UN.
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I concur with the idea of a different timeline, although it needn't be Mobius.