I have several real-world examples that I'd dearly love to bring up, but since they're likely to result in further acrimony, I will reluctantly refrain from doing so. Just mentioning this to note that yes, I am aware of those examples, and I am consciously not bringing them up. (No, it's not Nazis.)
The Sharlayans tried diplomacy, but it didn't work out. No other details were given, since the overnight evacuation of their colony in Dravania was seen as much more dramatic.
The one time the Eorzean Alliance rejected diplomacy was when Gaius van Baelsar delivered an ultimatum to the Alliance leaders, effectively telling them to give up their sovereignty or else. While this technically falls under the definition of diplomacy, I think we can all agree that the Alliance is well-justified in rejecting this. Every other time, the Empire has been dictating terms, with no room for negotiation, or indeed any interest in what Eorzeans have to say.
(I don't know much about 1.0, so I don't know if diplomacy was attempted by or with Nael van Darnus.)
Part of the disagreement is because it's very easy to conflate Garlemald as the nation with Garlemald as a people, as well as Garlemald as the ruling authority. Everyone agrees that not all the people of Garlemald are bad; most people agree that the people of Garlemald do not deserve to be destroyed. (The exceptions are outliers, and can presumably speak for themselves.)
The ruling authority of Garlemald, as its current government, is unworkable for any other nation, as well as any territory conquered by them. The issues are not so much them being actively evil, but more a systemic problem that lets evil be committed. Gaius ruled Ala Mhigo with autocratic yet meritocratic authority, and the Empire lets him. Zenos runs roughshod over both Ala Mhigo and Doma (by proxy with Yotsuyu), and the Empire lets him. That implies both methods of governance are acceptable to the Empire's ruling body, and they see little to no difference between authoritarian rule and deliberately inflicting misery on the populace.
I mean, Zenos's treatment of Ala Mhigo and Doma are not even beneficial to the Empire. Any potential resources these regions have are suppressed, and the entire rationale is that Zenos wants a good fight, and is hoping for a rebellion he can slaughter his way through. And yet Varis, his father and the Emperor, does not care.
One can imagine a hypothetical Legatus being put in charge of Doma (or Ala Mhigo or both, but the point stands in all cases) instead, who rules fairly and with mercy, looking out for the welfare of the citizenry, and punishing any instances of brutality. I would suggest that the Empire will also not care if this was the case.
So the ruling government of Garlemald is guilty of being apathetic to the evils being committed in its name. This is especially damning, because they literally have the power to stop these evils. I don't even expect them to be perfect, but at the very least they should not tacitly condone Zenos's pointless brutality for brutality's sake. There is no reason for them not to intervene, just to make these subjugated regions more productive. As it stands, Ala Mhigo and Doma produce nothing but misery and rebellion.
That is why I believe the government of Garlemald must be reformed, if not replaced entirely. Varis at the least must be deposed, entirely for his apathy in acknowledging what his son was doing. We don't know how deep the rot goes, so it's difficult to speculate more than that.
As for the people, I am inclined to be more lenient in judging them. I do expect the vast majority not to be sinless angels. In fact, I would not be surprised if most Garlean citizens we meet turn out to be jerks. But that still does not condemn them to extermination, or even subjugation. For the most part, they do not have as much power individually to mitigate the excesses of distant colonial governors.
Therefore, when I say that Garlemald is evil and needs to be reformed, I mean the ruling authorities of Garlemald, as in the ones with the power to stop, commit, or condone evil. However, I notice people thinking I mean the people of Garlemald. (The third definition of "nation", referring to the land, is irrelevant here.)
Personally I'd be skeptical if Garlemald is reformed but continues as an absolute (not constitutional) monarchy. We may be able to install a more benevolent ruler (puppet or otherwise) to the throne, but that does not preclude another Varis appearing in the future. To be fair, Limsa Lominsa and Ul'dah have the same issues. I think only post-war Ishgard and Sharlayan are appealing to our modern-day sensibilities.
And since this discussion apparently requires some measure of snark, I am now waiting for this entire post to be completely ignored by everyone else, in favour of slinging fire at each other and attempting to douse them with pissing contests.