C28 that got hit by a C40 with mil last war checking in..... yes, it's fine. The losers should be able to leverage down declares to do some conventional damage if they've lost enough infra that they actually reach that far down. And it's the responsibility of the winners to bail out the nation being hit. Don't see why this is a concern, it's just part of fighting a war in this game.
As for the suggestion, giving some light bonuses to nations being downdec'd isn't terrible, but giving bonuses to updeclares is genuinely awful. Presumably that'll just make dogpiles worse?
