The Federation colonists to that region are pretty recent arrivals, it's clear they've been there for one generation at most, if that, so it's not like the region was their "ethnic homeland" they had been living in for millennia. Also it's not like they fled an unstable, impoverished, over populated nation for new opportunity, the Federation is a massive post scarcity society. There's probably hundreds of planets in Federation space the colonists of the Demilitarized Zone could have been repopulated to without literally no discomfort, there's probably regions vacant enough you could move the ENTIRE population in one bloc so you wouldn't even be disrupting their community.
Essentially these people wanted to keep a brutal war going because they got "sentimental" about some planets they showed up to a few years ago.
Yep it is one instance of Trek where the liberal tendencies create a plot point far more dramatic than it should be in reality though it is somewhat understandable because they want drama and the stereotype is that it is hard to create drama in TNG era trek so what bigger drama then lets create this artificial reason as to why thousands/millions of people must suddenly leave their "homes" while of course barely providing a deep analysis on the issue.
For me though nevertheless the most hated arc for me is the Eddington arc on DS9 simply because Sisko behaves like a shitty spoiled child. The allegory to moby dick is too on the nose and in the real world I'd say "hey if you want to leave the Federation so badly don't call us when you get genocided by the racist xenophobic alien race next door, the universe doesn't give a shit about human morality."
Instead Eddington is absolutely right and comes across as a great character(despite being on the shitty side of the cause), Sisko is pretending he cares about justice when the reality was "nobody leaves the goddamn federation ever" and I'd just say Sisko baby chill nobody gives a fuck about the random officer that defected and ended up being eaten alive by a random Gorn or whatever.