I haven't done the full decades challenge, I've confined my game play to one decade but I have read a few decades challenge stories/write ups and some do cover non-American settings.
The obvious one here is @Daravi 's Kaufman Family Decades Challenge, which is about a German family and is mainly set in Germany. It's been updated recently so should be on the first couple of pages here. I thought that had an interesting take on war and dictatorships.
Other decades challenges I've read begin in the UK so they could use the Henford-on-Bagley setting for the start before moving to the US in later decades.
As for the morality and ethics...well, I'm usually gung-ho about writing and I've never issued a NSFW or trigger warning on my material. I wouldn't be offended by real, truthful history being written into a story but whereas the game restricts what you can portray, those tragic and horrific events in history can be mentioned or alluded to. I think it would be odd if they weren't mentioned.
Modern events presents a real life problem in that within our lifetimes there's been a lot of controversial events and with social media often being an unrestrained battle ground of anger and emotion and what could have been discussed more calmly decades ago now comes with risks of starting a fight between people. I don't know how my readers will react to me mentioning something like sexuality, gender, race, political opinions or world views so I just plough on with the story as I think it should be and hope that no one is seriously offended. So far, so good.
When writing historical stories the best ones, my favourite ones, stay true to the era in terms of the way people speak and their attitudes of the time. Unless they're actual villains no one is a villain of their own story. They are shaped by their time and culture so we, as readers, should cut them some slack when they fail to measure up to modern sensibilities.
Part of the fun of writing historical simlit is adopting the speech patterns, slang and idioms of the time period. But I have to admit, I picked one of the most stylish and visually pleasing decades of the 20th century so, yeah, vintage aesthetics is very important to me.
