Wasn't Nog's commission just as "field" as those of Watters and all the rest of them? So Nog would have no more right to take command than they.
And since Watters was actually placed in command by the real captain (who then died), IIRC Watters IS the captain and can only be removed by an actual command level officer.
That being said, I agree that Red Squad was a bunch of arrogant jackasses who got themselves killed. But the Klingons probably hailed them as heroes who died in battle against superior forces...a glorious death, yes, in a way?