I wouldn't call it "simplifying": capitalizing it has the same number of characters and is less ambiguous. I was already somewhat aware of BBC's style, but I still mis-parsed the headline and and thought "Nato" was the name or nickname of a natural person.
If I write an article about how 'France is having a heatwave' do you get confused and think 'France' must be referring to a natural person?
"We retain the middle cap in YouTube and MySpace because we think it prevents readers being confused by a word they are used to seeing in a particular way."
I'm used to seeing NATO, and thought Nato might have been a political figure I hadn't heard of.
At least for me, the confusion was cleared up immediately after looking at the article, but that doesn't mean this style of headline isn't any less confusing. After all, lots of places (like HN) only display the headline.