Banned In Korea: Both North and South. In South Korea's case, it's because THQ never submitted Homefront to the Game Ratings Board of Korea in order to receive a rating. THQ probably figured that, due to the backstory involving South Korea submitting to North Korean rule being highly controversial to South Koreans, not enough people would buy the game to warrant a Korean localization.
What Could Have Been: According to this article, the developer team were originally going to have the Chinese as the bad guys. However, due to America's Friendly Enemy relationship with China, American and Chinese economic dependency on each other, and fears of pissing off China's Culture Police, the team scrapped that idea and had North Koreans as the bad guys instead.
As a news site has noted, you'll sell more video games to the Chinese if you do not present them as genocidal invaders, while the North Koreans are unlikely to buy video games period.