In any case, the point is that World War I didn't start because of a major dispute that could only be solved by force of arms. So, a major war starting because Germany wants control of an island off its coast, and the UK doesn't want to give it up is perfectly legitimate in Victoria 2. In reality, there could probably be a diplomatic solution to such a case - but if Germany feels like it can bully, and indeed might prefer to bully, the UK into giving up the island then that is the course it will pursue.