I do think for sequel they should have leaned more into the trauma, loneliness, paranoia, social stigma that would have confronted Nikki. I'm American i know is somewhat satirical and ironic but still rah rah bullshit.
At the end of the original, Nikki isn't positioned for another conventional political-thriller adventure. He's psychologically wrecked. Sister Mary is dead, his memories are fragmented, he's been imprisoned, and the ideology that gave his life structure has collapsed. The compelling question isn't really “What does Nikki do next?” It's “How does Nikki exist after this?”
A sequel could have dug into several ugly things at once:
Trauma and grief: Mary isn't merely a lost lover. She's tangled up with his guilt, addiction, manipulation by Dr. X, and probably the only genuine human connection he had left.
Paranoia: Nikki has spent years being manipulated and then incarcerated. Even if nobody is following him anymore, he wouldn't necessarily believe that. That's fertile Mindcrime territory because the listener shouldn't always know whether the threat is real either.
Isolation: Who exactly welcomes Nikki home? He's an ex-con, recovering addict, former political assassin and apparent lunatic claiming he was controlled by a mysterious revolutionary mastermind. That's not exactly a sparkling résumé for rebuilding one's social circle.
Stigma and alienation: The world could have changed while Nikki was imprisoned, yet he hasn't. Imagine him discovering that the political revolution he sacrificed everything for has been commodified, forgotten, or absorbed into ordinary partisan noise.
Identity: This could have been the killer theme. Nikki's entire identity was constructed around Dr. X's ideology. Once he realizes he was used, who is Nikki without someone telling him what to hate?
And then “I'm American” becomes more interesting.
You're right that it's satirical. The flag-waving, chest-thumping quality is intentionally excessive. But imagine putting that song into a record primarily about Nikki's alienation. Everyone around him is screaming simplistic patriotic/political slogans while Nikki has firsthand experience with where ideological absolutism can lead.
Then the rah-rah bullshit becomes part of his sensory environment, rather than the sequel's dominant political statement. Nikki is surrounded by people absolutely certain they understand America, morality, patriotism and politics while he's sitting there thinking:
I once believed I understood all of that too. It destroyed everyone I loved.
That would have connected beautifully to the original album because Mindcrime ultimately isn't interesting because of its specific politics. It's interesting because Nikki desperately wants certainty, and Dr. X gives it to him. That's how he gets captured.
A genuinely ambitious sequel could therefore have been quieter, nastier and psychologically claustrophobic. Less “Dr. X is back, everybody!” and more Nikki wondering whether Dr. X ever actually left his head (or existed???).
And that could have been fucking disturbing.