We are in Lithuania. We sell software worldwide. Sometimes we can't deliver registration codes via E-mail when people purchase the license. Recently I removed several links from our PR5-6 pages because I can't access the sites (403 forbidden). And they will suffer because they don't have many good incoming links. Situation is getting worse and I am worried.
I understand the concept of "loosing few customers to avoid bigger problems". It is true that SPAM and variuos online fraud originates more from some countries than others. But still some fraudsters are everywhere, you won't become totally safe by applying the large country list, compiled by someone else, to YOUR filters. And I heard about things like IP spoofing. Please think twice, is it really necessary in your particular case?
I agree - banning entire countries is bad business. Sometimes, webmasters just don't have the time or the resources to fully investigate a problem IP address or IP address range, and they block the entire A-class address. They lose business (or at least visitors), and the visitors from the blocked address range can't get to the site.