Do you not see the obvious irony in taking a people who were forcibly removed from their home so it could be given to others, issuing them a TLD, and now you're suggesting forcibly removing that from them and giving it to others?
You can fantasize about the hardships the citizens suffered for the appropriation of the .io TLD and draw any analogy you want, but there are probably more pressing needs of the people you're not addressing by spending time to supply this sort of sympathy.
Worse, imagine a world where you actually advocate for the displaced indigenous people to care about this problem. Probably you'd be asking them to divert attention from real problems such as being able to afford food tomorrow.
But if those TLDs don't even bring them any money and they're not named after something in the Chagossian's own language, do they even own them in any meaningful sense?
Aside from the right to return to their homelands, these people should be given some actual royalties from .io domain purchases. And then maybe also a new TLD that is more meaningfully connected to them and less likely to be hijacked.