The "national treasure" thing came about from a post from Dick Gaughan in, I think, uk.music.folk some time ago. He said that the masters that Celtic Music owned were a national treasure, and that his behavior amounted to cultural theft. Mind, Dick Gaughan has also been ripped off by Celtic Music, so I'm not sure he is the best authority on the subject, as he too has an ax to grind.
So, to answer your question, the nation involved in the "national treasure" argument is Britain. While Dick Gaughan favors more sovereignty for Scotland, he still manages to be conveniently pro-British under these sorts of circumstances. The argument being, it was once thought better that the "national treasures" had been bought by a shady character (Bulmer) who was British, rather than being bought up by (God forbid) an American label like Rounder Records or some similar business interest that buys up old masters.
Ron is right. Musicians lose the rights to their songs because THEY SELL THEM FOR MONEY. I was watching a program about the Beach Boys the other night on the telly. It seems that the Wilson boy's father sold all the rights to their hit music of the 1960s for $700,000. That catalogue is now estimated to be worth $20 million or so.
Now that Mollie Music has generated the publicity to sell Nic's last two CDs by manufacturing the "poor disabled Nic Jones" controversy, the reissue by Bulmer can now threaten their sales. The fact is, Nic's disability never had anything to do with the facts in the circumstance. Nic lost the rights to his songs. It happens to a lot of musicians, many of whom fall on hard times every bit as bad as Nic's. The whole thing just leaves a bad taste.