>>150219153
>Pretty sure it was set aside by the EK for that purpose in the first place
Not exactly. It was mostly Aang's doing. The land was a former Fire Nation colony where the inhabitants didn't want to go back to the Fire Nation nor submit to Earth Kingdom rule. Both Zuko and the Earth King were in fragile positions after the war, so they couldn't just immediately back down. Thus Aang ended up forcing a compromise by carving out the land as a neutral territory that eventually became the United Republic. By Kuvira's time, it had been something like 170 years since that land was Earth Kingdom territory, but there's definitely an argument to be made that it was supposed to be returned to the EK during that time if not for Aang and Zuko sympathizing with the former colonists and the Earth King ultimately caving to the Avatar.
The true lesson is that your primary goal as an invader should be impregnating as many native women as possible so that the mixed ancestry children will become such a large demographic that it'll create a political quandary during peace negotiations.