I don't necessarily agree with everything you said but I think you make an important point. We play to have fun, sure, but I don't think it means you can do, as a dev, whatever you want with history.
I do not play HOI4 but I play EU4. I agree with what you said about slaves as a "trade good", we should maybe give the option to abolish slavery, at a cost.
But regarding the "genocide natives" button, I don't think it should go away. Yes, it is gamification of genocide, in a sense, but in fact, I think it makes a good point : the massacres that took place during that period were not only bad, wicked things, they could be profitable too, and in certain scenarios wiping out the local inhabitants was an efficient way to make room for colonists or to prevent rebellions. Several times during my games, because of wars or some immediate threat, I was forced to move my armies away from my developing colonies, and I then faced a dilemma : should I wipe out the locals, just in case they rebel ? Should I spare them, and pray that they don't rise up ? Should I chose between my helpless colonists or the armed natives ?
I think those were the kind of questions a leader had to face at these times. The fact that we, who are modern people who despise slavery and genocide, are faced with the same difficult choices highlights what I think is an important lesson about colonialism, slavery and genocide : even a "good" person, a quite benevolent one, can carry out horrible, barbaric things if the circumstances require it, or seem to require it : therefore, the true evil, the fundamental evil is the system, or the mindset, that makes such a decision logical and profitable. In that case : colonisation. (I am not saying all the people who participated in colonisation were not evil and reprehensible : but I really think that as long as you have a system that rewards horrible things, you will get loads and loads of people who will try to take advantage of it anyway, so you have to destroy the system as a whole and that involves a lot of work).
Slavery, and colonial massacres, are not only a problem of bad guys doing bad things, otherwise it would be too simple : they involved lots of people, some bad, some quite decent, who all agreed on some core things such as : colonialism/slavery is good, we must do what it takes to expand our empire/get richer using slaves/protect our colonists from lesser people. So, yes, you can exterminate people in your colonial holdings in EU4 : but when you accept to play the colonisation game, killing the natives is an efficient tool. An horrible, barbaric one, but an efficient one, in this situation. So you have to ask yourself some questions : should I put myself in this situation in the first place ? (You can always stay in Europe !). Can I avoid killing any of the natives at all ? (Yes, but it may cause you some trouble later). Those are, I think, interesting questions, that change the way you apprehend the colonial aspect of EU4, if you want to play in a "humanist" way.