Very good point! I'd say that in one case, you are dealing with averages over a population, and averages definitely wash out differences which I think are important. An Olympics team is a different statistic, the max of the distribution, the cream of the crop. One is a sports competition and another are a set of rankings that give us insight into a population and how their culture and laws affect the performance of said population.
But I'm afraid I have no retort to the Olympic question other than that is it a completely different ranking of the best of each population rather than the average, so different rules apply? I'm not sure that is a good argument against your sentiment, though.
If anything, population size matters way more when picking out the cream of the crop than the averages. I think the point being made is less about the Olympics specifically and more that it makes little sense to divide up the US economy by state when the US is very clearly one single country.
But I'm afraid I have no retort to the Olympic question other than that is it a completely different ranking of the best of each population rather than the average, so different rules apply? I'm not sure that is a good argument against your sentiment, though.