We have plenty of diplomacy. But diplomacy only goes so far. Military exists because diplomacy doesn't always work and there are plenty of reasons why it might not work.

Yes. But there is a very real difference in escalation as a last resort and as the default.

The Prisoner's Dilemma is about operating with zero knowledge from and coordination with the other parties. Diplomacy lets us avoid that in the real world.

Aren't you just hoping that people who seek peace and diplomacy are on the Chinese/Russian/etc side when shit hits the fan?

What if they aren't? You can have all the peacekeepers and diplomats in the world, but if the other side isn't willing to play by that game, then they wont.

They're strongly incentivized to play by the game when the alternative is annihilation. For 70 or so years, that kept everyone safe.

The optimal strategy for iterated prisoner's dilemma is tit for tat.