I agree with your criticism to a certain extent. However, with any faction within a war, you will have people who are irredeemably evil, those who fight for another reason and those who don't want to fight at all. Kegon Falls had some irredeemable people, and the manga doesn't bother trying to...
The Kikoku unit is kind of like a third faction? They are all Onis, but do not align with the views of the main Oni group. I guess a hybrid group of half-Oni/half-Momo faction would be pretty interesting to see. Kind of a shame that the hybrids don't have a combination of Momo and Oni powers...
I'm guessing the medicine in and of itself is quite expensive, and it not being in Japan is just making it even more expensive (maybe researching it more, approving, distribution, insurance, etc). But yeah that could be a valid option if there was a Momotaro squad abroad.
In the manga, the Oni vs. Momo war is pretty secret. No need to keep up a farce if the public doesn't know anyway, as long as the soldiers fighting believe they are righteous, they will do anything to destroy evil.
Hey guys. I'm the translator and typesetter of this chapter. The previous chapter has been put on Reddit, however it was done crappily by me so I'm redoing with a scanlation group. It's on the official subreddit of Tougen Anki. I'll be working on 176 asap, just need to typeset.