Is it wrong for Norway to protect its domain? They don't want the ".no" domain to be the target of "domain hacks" from people who have nothing to do with Norway.

So if you want a ".no" domain, prove that you are Norwegian, the limits are to prevent the kind of abuse we see in most other TLDs (domain squatting, etc...). All that seem reasonable to me. Some countries put less restrictions on their own TLDs, especially tiny countries with interesting TLDs which they see as a revenue source, that's fine too, but to each his own.

If you don't like it, use any of the generic TLDs. AFAIK, Norway doesn't put any restriction on them.