If Hitler increased Germany's military production by 200%, at the expense of other aspects of the economy, that's scary. If a Hitler-equivalent increased Brazil's military production by 200%, who would notice, aside from its smaller neighbors? Minor countries should be able to achieve limited goals, not be forced to just sit there until some larger country decides to steamroll them. On the other hand, if garrison requirements, supply costs, and other "realistic" limitations make it difficult or impossible to do some things successfully, or have negative secondary implications, that's a positive. The game should allow you to try things which are "within reason", but eliminate absurd exploits, like placing wargoals to annex countries when you didn't commit a single division to the effort or occupy a square inch of ground.
I don't think that a lot of the industrialized nations in Europe should be limited to 1 factory, because a lot of them did produce infantry equipment, artillery, and small numbers of armored cars, aircraft, or even a few tanks in some cases. I don't know what GER is getting, to make a reasonable guess as to what other countries should have in comparison, but if the smaller industrialized nations like Czechoslovakia, Netherlands, Hungary, Romania, or Sweden are getting 1 factory, then there's no point in playing them, because they can't even field what they did historically, and are merely "speedbumps" in the game. If "historical" means "impossible to achieve as much as they actually did", then I want no part of it. If there's no way to achieve anything, why bother to play the game, or why not just set it all up on AI control and watch the "WWII movie" unfold the same way every time.