It has everything to do with areas of operation. There were three regions in which Square officially operated Final Fantasy XIV: North America, Europe, and Japan, none of which have seen a war in decades - the Balkan Wars happened in the 90s - until Ukraine was attacked.
(I am not sure if the same is true for Oceania, though I highly doubt New Zealand and Australia have been involved in any wars in recent history either. Not sure about the smaller Oceanian nations though.)

While wars have happened in other regions, those were not reason to suspend demolition, because they did not affect an area Square officially does business in, and are thus unlikely to have a large playerbase for the game in. That's it. Anyone going "but there is always a war somewhere" is engaging in bizarre levels of hyperbole.