I agree it's possible, I disagree with OP that it's a foregone conclusion.

At this point if I were the owner of a .io domain I would treat that as the unlikely best case scenario and start looking at what domain I'd fall back to if ICANN sticks to their rules.

https://en.m.wikipedia.org/wiki/ISO_3166-1_alpha-2

Breaking with ISO 3166-1 comes with the risk that a new ISO-standardized country cannot claim its TLD.

So in order to reclaim the TLD as generic, startups dont just have to persuade ICANN, they have to make the case to ISO that IO is a significant enough code that it should be an "exceptional reservation" like UK, UN, EU, and SU.

At one point, it was intended that moving the UK's internet resources to .gb would be the final stage of the transition from the internal JANET system.

By the time I first heard about that in the early 90s, that had already gained legendary "that'll never happen" status - and, sure enough, the transition was declared complete when the last UK.AC.SITE <-> ac.uk mail gateways were retired circa 1996.

Apparently "United" and "Kingdom" aren't valid for ISO, so they went with ignoring part of the name completely.