One thing that I cannot find in the books, or the GURPS version, is any mention at all of the use of poison gas. Since poison gas was used extensively in World War I and afterward, (but not in World War II for various reasons), it's not as though the technology to use it doesn't exist. A Chtorran "mandala" (settlement) or "city" would probably go down very quickly to, e.g. an attack using chlorine, phosgene or mustard gas.
It's not mentioned by name, but a repeated statement is; "Anything that can kill Chtorran life is even more lethal to terrestrial life".. There's a Chtorran equivalent of Red tide that can only be killed by pouring oil on it and setting it on fire. The US drops nuclear weapons - dozens of them - on the mega-nests in the Rocky Mountains... and in six months the nests completely rebuilt themselves!WM Ds tend not to be used except in situations of complete and total desperation - to buy time - because the only sure result of a WMD strike is that terrestrial life will be annihilated, and thus be unable to offer even minor resistance to Chtorran infestation. Use anything of the sort, and things will be exponentially worse than if they were used at all.
Oh, and nerve gas is actually mentioned in Chapter 34 of A Rage For Revenge - added to "worm charms" given to kids in the hope that if the kid is eaten, the worm will die in the process. It's actually a half-assed attempt at euthanasia for the kid - nerve gas is no more dangerous to a worm than low-grade food poisoning is to humans!
The main reason chemical weapons weren't used after World War I is that they are simply not very effective. And while Chtorrans don't wear gas masks, they, as mentioned above, are very resistant to just about every form of harm. In addition, to truly combat Chtorran life you need to completely wipe out the entire ecosystem, not to simply kill large animals. There are theoretical ideas about chemical weapons this lethal, but those will also effectively make the whole region uninhabitable for long periods of time - that's why those ideas weren't pursued IRL. Even chemicals weapons good enough to reliably kill just humans in relatively small concentrations, like nerve agents, are often extremely persistent and make the terrain dangerous to humans for long periods of time. Considering how widespread the infestation is, mass use of such poisons risks too much collateral damage to the Earth's native ecosystem.
The analysis about how effective chemical weapons were in World War I is false; there was a reason why for years afterwards chemical warfare had the sort of stigma we now attach to nuclear warfare and would keep it.. more or less until we started using nuclear warfare. The main reason why it wasn't used afterwards was because it was a war crime even before World War One and there was the pending risk somebody using it would be tried and hung (as the Japanese had happen to them), and it was nasty enough to trigger a case of Even Evil Has Standards in *Hitler.* The main reason why it wasn't very decisive in World War One was because- frankly- of the numbers of people that could be mobilized and how people adapted to it (with things like gas masks). That said, the rest of your points are valid; chemical warfare is nasty but the Chtorr are nastier and extremely difficult to kill. And people still use it anyway because they have no better choices.