You are talking about pdflatex, which is the default latex compiler in many LaTeX distributions. Most distributions also ship xelatex, which is the LaTeX compil

You are talking about pdflatex, which is the default latex compiler in many LaTeX distributions. Most distributions also ship xelatex, which is the LaTeX compiler of the XeTeX project. XeTeX and xelatex indeed do support all the wondrous diacritics and Klingon symbols of unicode fonts (TTF or OTF, no less). However, LaTeX math still has to be written with \LaTeX symbols in order for the math engine to lay out symbols correctly. After all, a \sum is conceptually a different thing than a \Sigma. You can easily type your Euro Signs, typographic quotes, or Klingon symbols as unicode, though. By the way, lualatex, from the LuaTeX project, behaves the same, although somewhat slower and infinitely scriptable in Lua.