IIRC Unicode doesn't define country codes. It was a workaround for a political issue of which countries recognize which other countries.

It would have been difficult to get the CN delegation to sign off on a list that contained TW, although there are probably others.

As I understand it, there is no two-letter ISO code for the USSR because when they update the standard they remove countries that no longer exist. In at least one case they have reused a code point: CS has been both "Czechoslovakia" and "Serbia and Montenegro", neither of which currently exist.

As a result, two-letter ISO codes are useless for many potential applications, such as, for example, recording which country a book was published in, unless you supplement them with a reference to a particular version of the standard.

Is there a way of getting the Czechoslovakian flag as an emoji? And did Serbia and Montenegro get round to making a flag?

Unicode doesn't define any flags, really. That's up to the font rendering on systems/libraries.