I'm not exactly sure what you mean by either one, but they sound different. Resolving IDNs is going to be pretty easy no matter what we do, because DNS is pretty versatile. The argument for ACE is that it allows IDNs to flow through all the untold existing protocols and software unharmed. I fail to see the point of your second note. If ACE is seen as the solution, then there is only one transition.
Transitions are typically difficult and disruptive.
Two transitions are twice as difficult and disruptive as one. The issue of encoding efficiency is interesting. I did not mean to imply that UTF-8 is bad in general, or that encoding efficiency is important in general. I am very impressed by the elegance of UTF-8, and would endorse it for almost any situation where you want to use a single character encoding. Encoding efficiency is usually not a top concern.