Two character TLDs are reserved for country codes, and they're meant to reflect a very specific ISO-standardized list of country codes:

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.