Why, though? It still results in athletes representing a group rather than a specific country. Why does that not affect your enjoyment of the Olympics the way having non-countries represented at the World Cup affects your enjoyment of it? Besides which, you asked if people can imagine if the Olympics did something like that. Well, regardless of the *why*, they *do* do something like that. And have been doing it for decades.
It's not even like the "big boys" aren't represented at the World Cup. The usual power houses that are expected to win the tournament were all present: Canada, USA, Russia, Sweden, Finland, and Czech. All they did was make the tournament more competitive by replacing the bottom two teams (who likely had no chance at winning or even being contenders anyway) with two better ones.
If it's a hang up over the "historical significance" part, that goes back to my question above about athletes from a group or group of countries potentially winning medals at Olympics not seeming to be an issue.