With Iberia they deliberately targetted where the military was massed at to finish the war with a decapitation strike which broke their will to fight. Ironically this might have prevented more casualties in the long run as I doubt Iberia would have surrendered the Islands (a springboard for any invasion!) as easily without the implications of an atom bomb looming over them. Other powers would have also considered intervening directly to finally cut Elysiumite ambitions down to size. As far as Nuking everything goes, it's counter productive to irradiate every bit of conquered territory if they plan on settling them with their Citizenry as well.