How did Capcom come to make the decision to produce a game where the player takes on the role of the someone killing thousands of their countrymen [...]
Well, many games did allow to play former 'enemies', either as alternative, or only major content, like
All the way to
All of them are made by US companies while thousands of US soldiers did die in these battles, didn't they? The fact that the US prevailed doesn't undo their death. But, does this matter in context of a game?
Games are meant to allow the player to experiment with a certain scenario/environment and prove against that setup.
Making games under a nationalist POV is be a rather bad idea, taking opportunity from players and making games not as good as they could be - unless the makers goal isn't providing a great game but rather about indoctrination and propaganda, isn't it?