Hmmm, I thought Yahtzee was a bit more in touch with science fiction and fantasy than that.
To be entirely honest, I think one of the reasons why The British tend to wind up in nazi-like roles, is because they revel in it. It has nothing to do with historical fact, but if you take a look at things like "Warhammer 40k" which is a hugely popular franchise, created by and run out of the UK, you pretty much have a game based around the idea of the oppressive regime of "space nazis" are the good guys. You even have heroes running around with names like "Davion Thule" in the video games, Thule being a referance to "The Brotherhood Of Thule" which was the occult organization Hitler apparently belonged to. It's full of little touches like that. However on the other hand it seems very few people sit down and make complaints about it.
I'll also be honest in saying that "Warhammer 40k" isn't the only British walk in the park with this paticular theme. "The Mutant Chronicles" was another franchise from down there that was never a huge success, but has managed to live on the fringes of nerd culture for a very long time now, it just keeps coming back to life in one form or another. The Brits/European faction in that one is again a big "Ruthless Facism is okay if it's justified by an extreme enough threat and a hostile enough enviroment".
Oh and let's not forget 2100AD and Judge Dredd, while set in the USA it's another UK creation, extremely enduring, and it's gone all over the world, and the authorities are hardly any nicer down in Europe. Again it's one of those things where "being a sadistic oppressive twat is okay if the enviroment is hostile enough".
Then we have "lesser" British works of comics, like "V For Vendetta" which while not as over the top as the movie, still featured a very oppressive (if far more benevolent than usual) future society as the backrdrop, without being entirely judgement of it (the name of the game here was how ambigious it all was). Then of course we have guys like "Warren Ellis" who is praised for his British characters, and almost all of them even as straightforward good guys are brutal and fairly sadistic, oftentimes knocking American "nonsense" like morality and the human treatment of the enemy when it comes to combat. I don't totally disagree with them in certain situations (as some might guess), but it's a notable trend.
So really, saying "OMG, where would you get this idea about the Brits forming an aggressive society of pseudo-nazis, it's so anti-thetical to who we are", is kind of silly when you can just point to piles of British fiction on the subject, a lot of which presents such attitudes in a fairly positive light overall when you consider the big picture.
I don't think Brits are actually a group of evil, totalitarian, jerkwads or anything in reality, I mean there is plenty of American fiction that can be seen the same way. An oppressive American goverment is actually a stock villain nowadays, far more so than using Brits (even if it's not uncommon) which is why I think this desician was made.
Honestly, I don't quite get the outcry, to me it seems like black people using a certain "N word" and then complaining profusely when anyone else does it. Except in this case, I don't think most brits object, and would probably wind up thinking the bad guys in "Killzone" are cool just for that reason. Of course I haven't really gauged overall European reactions. The worst I could think of as a resonable action would be saying that it's pretty derivitive with all the similar stuff.
Just something to consider.