i have thought about the possibility a few times, but to take such a risk, the advantage/use of actually doing it has never been big enough compared to the damage it brings along.
For the allies: taking Spain makes a good place for USA to work from, it is only 1 turn away from the USA and there can also be an IC built there. Consequences: you’re sacrificing Russia and the Middle East by giving Turkey to the Axis.
South America is in theory extra money for USA, but as i see it, that is of no importance since you’ll be investing more than you will get out of it (unless in the - very - long run, but in this scenario there probably won’t be any long run)
For Axis: taking Turkey has some interesting stragetic advantages, but you’re practically giving Spain to the USA, making South America a neat present of IPC and units for an already strong USA, and Afghanistan is a useful extra for UK/India.
So it’s even more suicidal for the Axis as for the Allies.
My personal conclusion:
As Allies, in certain cases USA could use the Spain-card for a hard, fast hammer in Europe. For example, if the situation in Russia and the Middle-East seems hopeless, it could work out as an emergency strategy, especially if the Axis are really not prepared for it
As Axis (which i have a lot less experience with) i don’t see much profit from it at all.
I have to admit: i am always hoping my opponents would some day do a true neutral crush :-D
edit: they never do.