Personally speaking, I actually don't mind his nation, on principle. An apocalyptic event destroying a nation to see the rise of a radical extremist version built on nazi superscience is actually more along the lines of a proper dieselpunk Nazi Germany in comparison to Moravia which honestly reminds me more of Fascist Italy. 

The actual problem I have here is genre and tech creep. I know full well that the "Atom gun" is complete bullshit scientifically, however he could probably respond in kind on the things like flying battleships (Which is physically impossible, even with a 100% efficient lighter than air gas and "Mithril" light metals) and impossible genetics (like my Naga people). That said, the issue here is that we are doing a dieselpunk setting and from my long, long experience in NRPs, usually when you allow elements of more advanced genres in (Like a steampunk 18th century allowing WW1 stuff in eventually leads to Cold War gunships and cruise missiles, which happened once) it happens.

At the end of the day, I suggest to allow the GM to just give his verdict and move on.

my suggestion (Chemical weapon/bio-weapon or a less advanced nuclear disaster) still stands though.