Doesn't that yield a whole class of problems though that we're trying to solve with obtuse solutions such as "let's make that character set in red so people don't get phished"? How is that any more international and/or easy to use?

It seems that putting the allowed character set into the tld would be a pretty user-friendly way of doing that.

Edit: As an added bonus, tlds are centrally managed, and are already western/latin encoded. So why not customize it with a localized abbreviation for the language or tld type?