The idea is that back when IDNA was created sending just-UTF-8 in places that had historically been ASCII-only would break software. The scale of the breakage

The idea is that back when IDNA was created sending just-UTF-8 in places that had historically been ASCII-only would break software. The scale of the breakage was probably unknown. The real question is: would a flag day have been needed to just use UTF-8 where previously only ASCII was allowed. I think the answer to that is "no". The punycode thing certainly avoided the question altogether, which is why it was done, but there's no question that had we bitten the bullet then and just gone with just-use-UTF-8 life today would be easier. (There's also Unicode normalization issues here. One of the problems with just-use-UTF-8 is that dumb servers would only match on octet-wise label equality, but with Unicode you want normalization-insensitive matching. Now, at the time the notion of normalization-insensitive matching hadn't been invented... Requiring something like IDNA made it possible to slip in a normalization requirement.)