It seems like a reasonable compromise would be to allow domain names in non-Latin languages as long as the entire name is in the character set of a specific language. So, if your name is in English, that's fine. If it's in, say, Cyrillic, that's fine too. But if you mix English and Cyrillic characters, that's not allowed. It wouldn't necessarily eliminate all name look-alikes, but it would get rid of most of them.