And yet the Korean and Vietnam wars happened with China being a big part of the conflict. Big nations using "lesser" nations as pawns in a war (both official and unofficial). Happens all the time...sadly.
Just because a war is a losing proposition to the outside observer doesn't mean it can't or won't happen. If history teaches us anything, it's that it will happen.
You're right, except...what role did the Chinese navy play in either of those conflicts?
It's significant that no modern war, outside of World War II, has involved fleet-scale naval engagements. There's a reason for that - to really fight a naval war, the combatants must have relatively equal naval strength. The ocean is big, but it's not infinite, and while fleets of ships can run, they can't really hide. The more powerful force can usually force an engagement, and when it does so, it will usually win. Sometimes, the superior power doesn't even need to force a fight - in both World War I and World War II, the German navy (with the very notable exception of the U-Boats) spent pretty much the entire war holed up in the Baltic because if it sailed into the Atlantic it would've immediately been sunk by the British Navy.
Armada is a game of capital ship/fleet battles. Capital ships/fleets exist to fight other capital ships/fleets, or, if none exist, support other military elements.
Even if one can contrive a reason for these criminal elements or lesser federations of systems to have capital ships, it's basically impossible to conceive a reason why they would be fighting the Empire or Rebel Alliance on a fleet engagement scale. The best you can really do is something like the Hapans, who had a fleet of ships protecting their isolated star cluster, but avoided confrontations with the Empire and eventually fought on the side of the Alliance.
I think that while it's entirely apropos to take a lot of inspiration from RW conflicts - just the way that George Lucas too inspiration from WWII fighter combat - we should recall that space in our fictional galaxy is fundamentally different than the RW seas. In the SW galaxy, fleets can hide, and space is - to all extents and purposes - infinite.
If your RW logic were to hold, then it would be just as true for the rebels as the cartels. Why would the rebels be able to mount a naval offensive and not the cartels?
Sure, the Hutts collectively would be in a tough spot if they attacked the Empire, because the Empire knows exactly where the Hutts are (Hutt Space). But maybe the Empire treats Hutt Space the way that the United States treats the Middle East - having a pattern of alliances with some Hutt kajidics, but not with others, and not being particularly capable of identifying friend from foe.
I didn't say that couldn't, I was saying they wouldn't. There just doesn't seem to be much or any value in a cartel or syndicate pissing off the Empire or Rebellion. One of the main elements to the, well, criminal element, is a desire to stay under folks radar, and if you get noticed, be useful enough to not get gutted by the bigger fish. This is actually what leads to some of the greater narratives, to my mind. This is why scum work for the Empire, and why the less heroic smugglers worked for the Rebellion. If you are useful, you get a blind eye. I just don't see criminals picking these fights and risking the wrath of tyrants or rebels.
I'm all for folks creating their own narrative, but ostensibly Disney wants something more cohesive, hence the purge. I think we'll see criminals in smaller scale and thus more profitable for less risk style roles.