The history there is unfortunate (although the history lesson itself is welcome), but at the same time this is akin to saying: you should boycott products and services from the UK/US. If you feel that way, you can try to do that, but I get the feeling that purely logistically that would get pretty difficult to do. Looking at every piece of food you buy at the store, to see where it's from, looking at every website of the companies that you want to do business with. You might lose access to a lot of hardware, appliances and even the majority of the websites out there to make a stand.
I get why one might single out the .io domains for symbolic reasons, but at the same time most people probably think of something like I/O and haven't even heard of Chagos Archipelago, ergo there's not a lot of intentional legitimization/reinforcement of any kind going on.