It seems improbable that Noxus would survive given its social and political environment but against all odds it does. Shouldn't Noxus have collapsed very early in its history? Is the war with Demacia the only thing keeping it alive by allowing its citizens to rally behind a powerful enemy? How about Demacia? Does its war with Noxus keep its citizens from looking into society and seeing something wrong with its draconian legal system

Probably. People will throw all logic out the window, and give up any right or dignity if they're told that it means victory against a big enough enemy. There are easily thousands of examples of this happening throughout history. Rome was a pretty pitiful Italian state until it got a few good wars under its belt. And since Demacia and Noxus are direct philosophical opposites, it's likely that both of their citizens are more horrified of living under each other's rule than they dislike their personal hell-holes.

It's a wonder that since the armies of Demacia aren't allowed to retreat how they've managed to keep breeding up enough people to throw at Noxus, since a couple Noxian assassins are pretty much the Mary Sues of LoLore