It seems there are some misconceptions about what DNS is and
is for
DNS is not "for browers" or for "this or that app".
Is a communication protocol used to map an "application level address" into a "network level address".
The form of such "addresses" must be the same in all DNS system around the universe.
The way an host-name is represented in a DNS string was ASCII, and had been extended to include all Unicode sets by means of an encoding named "
punycode[
^]". And that's how DNS strings are supposed to be transmitted around the world, and -hopfully- stored in zone files.
Whatever your opinion is about the efficiency of that encoding, changing it requires a change in all DNS around the world (nobody can actually know how many of them are) in a way that the new coding does not disrupt the existing ones.