> Localized scripts are exclusionary to everyone else
It's the other way around, not supporting other letters is excluding everyone else because essentially only English doesn't have diacritics.
"Año" and "ano" are not the same word, degrading to ascii only is not an acceptable solution. Imagine for example that the letters 'd', 'q' and 'w', weren't availabe in domain names for some reason and you had to use alternatives. That's how it feels.