This is my fault, sorry about that.
The short answer, is that I think we should revert a change related to country names. This could probably be done for CiviCRM 4.7.9.
Long answer and mea culpa:
I am one of the people responsible for pushing new strings to Transifex when a new CiviCRM release is published.
When strings are pushed, we also review new strings to make sure that we are not pushing too many strings with typos, bad programming, etc. For CiviCRM 4.7, the release process was a bit different, and the strings were pushed to Transifex much later than usual. It's only then that I noticed that the country names were all uppercased (CRM-16876).
I disagreed with the change and wanted to have more feedback before pushing the strings to Transifex. It would have required translators to re-translate ~ 350 country names. However, I was backlogged by other important issues in 4.7, so I had not gotten to it yet.
To address some arguments mentioned in this thread: should the (foreign) country name on postal labels always be in English? Should it be in capital letters?
Maybe, but that should be a mailing format option. We could probably add that pretty easily in core, in a similar way that we have {contact.state_province} (abbreviation) and {contact.state_province_name}.
Currently, contribution forms with a country field do not look good. A list of uppercase names is hard to read and unusual.
As someone using CiviCRM in French, I would expect that other francophone countries would have their French country name.
Having a translated country name is also important for backend forms, where staff may not know the name of a country in English.
If you are interested in improving non-English support in CiviCRM, please subscribe to the "intl" discussion mailing-list (also known as the "Translation Working Group"). You do not need to be a programmer. We need translators, users and anyone using CiviCRM in non-English to give more feedback to help guide CiviCRM development.
We also have a list of language/locality-related items that we have identified as needing improvement. One big challenge is also raising awareness on what is a translation challenge. It's not always easy to know what can affect non-English users.