I guess another good example would be how the Eastern Roman Empire cut off the Western half when it became apparent that the Nordic hordes were tearing it apart. Rather than waste any more resources trying to garner it back, the Eastern Empire (with Constantinople as the capital) "cut their losses" and just let the vandals wipe out the Western half.

If the Republic was in much the same shape and Naboo was essentially in the "western half" of the Republic, would it be that much of a stretch to copy a page out of history and have the same thing happen (or as you, shanerjedi, suggest, adding in an element such as gold, oil, the "spice", cheap plastic toys, etc for the (trade) federation to want to take)?

If Naboo was renamed Alderaan to could further reflect the "sacking of Rome (the old capital)" whilst the new capital, Coruscant (Constantinople) remained the source of power of what was left of the old Republic/Empire.

Again, this is not a thing that HAS to be done, so much as if you are going to go this route, here is how you can do it.