The draft is supposed to be a guideline for creating URLs, to avoid the bad surprises of a user not finding a resource. If we avoid a recommendation despite the fact that we knew there was some problem, that's a bad idea. That's clearly an argument I can't accept. A lot of scripts don't even have case distinctions. This is no reason that those scripts that do have such a distinction shouldn't be able to use it.
Some scripts have more letters than others.
Saying that a script A can only use so and so many letters because B doesn't have more than that is very strange. The great majority of the French at least went silently with it. Newer technology is on the way to fix this. We either judge that the situation is currently fixed well enough, or we judge that it will still take some time. Either way, we can't let the rest of the world be affected by the messy French situation, as well as French shouldn't be affected by problems in other languages and scripts.