That's the problem with that story, and why it would never be in canon. If Superman is willing to go to an Iranian protest, why doesn't he just grab Ahamindajid and Kim Jong Il and Ghaddafi and throw them all in jail? It just opens a huge can of worms that destroys the spandex combat narrative of comic books.
I've never been convinced it would, really. Do stories in the DC Universe really turn on whether Ahmadinejad is still the president of Iran? Do they turn on whether there's realistic suffering in the world? Or do they depend more on space monsters and Lex Luthor in a hideous green-and-purple suit?
Now, I don't want them to ever go full-on Miracleman with that sort of thing, because when you do that you rapidly run out of places to go--it's hard to say how many more stories Miracleman could have generated by the time it ended. A big coming-out-of-the-closet action scene for Young Miracleman is about the logical extent of anything relatable Gaiman could have done. (And it's interesting how Moore and Gaiman, using the superhero, slammed right into the singulatarian problem in literature before the term was invented, but that's another discussion.)
But just getting rid of dictators, appealing to people's sense of justice, and beating up on Nick Naylor? That's literally what Superman was invented for. Supervillains had to come in to make it remotely interesting. And supervillains stuck around.
Somehow, so did the dictators. And it's never made sense, and rarely added much to the stories. Maybe Ruman Harjavti. He was pretty neat.
Now, there
is another way to handle the "Why Does Superman Leave Hitler Alone?" problem, that has a pretty nice pedigree. And that's the Doctor Doom solution. See also Black Adam. You want dictators? You make your dictators supervillains. Then you have a proper reason why Superman or Wonder Woman aren't busting their chops: if so, the collateral damage would be immense, and they could possibly die, leaving no deterrent to the supervillain expanding his power.
And, really, aren't real-life dictators basically supervillains anyway? Kim Jong Il, I mean that guy is completely Thaddeus Sivana.
As I recall, they skirted the issue in WWII by saying Hitler held the Spear of Destiny which prevented any superheroes from entering Europe by a magical barrier.
I've never been really clear if that was the case. In James Robinson's The Golden Age, it was just a cover story for Parsifal (it is not made entirely clear why the U.S. needed to invent a cover story involving Jesus' blood in order to hide the facts about a Nazi who could depower superheroes).
The only time I recall the Spear of Destiny in the DCU proper was when Superman was gonna gore the Spectre with it, after the Spectre destroyed Vlatava (sorry Count Vertigo! you suck anyway).
It's a slight failure of imagination, too. It'd be easy enough to explain why the true Green Lantern and Flash (Alan Scott and Jay Garrick) didn't take the Wehrmacht apart in a day, if Nazi Germany and the other Axis powers had supervillains in proportion to their own population.
Unfortunately, most American comic writers have
never been good at even trying to create superhumans who weren't American too. It's not even a 1940s thing. Despite a sustained effort to make it more international, at least a plurality of major mutants in the Marvel U are American for some reason; and the vast majority are ethnically European. (E.g., Claremont's Giant-Size lineup: nice try, seriously--but how many weren't white or American? Sunfire and Storm, iirc. And Sunfire isn't even an important character.)
