Changing the existing standards just won't work as it would break a ton of programs, although if I'm being honest - while I like the idea of such a terminal rework - I don't know if it can be done nowadays without it opening the flood gates by developers who just can't restrain themselves from adding so many features it might as well be a new browser engine.
And either way I don't think it's worth the effort as those input limitations only affect a few specific situations. I use hundreds of custom keybindings in Vim and so far the only obstacle I encountered was the `Tab` & `Ctrl-i` overlap. If I need to hold down more than one modifier I did something wrong anyway.
However I like those modernised protocols and it would be neat to have widespread support for it.
~ >=> time st ls
real 0m0.048s
user 0m0.041s
sys 0m0.008s
~ >=> time kitty ls
real 0m0.239s
user 0m0.173s
sys 0m0.059s
If kitty isn't nicely cached it takes over 500ms on my machine.
Using your suggested flag it still takes twice as long."time kitty -1 true" takes about 180ms on my machine. That's more than fast enough for me, but certainly slower than many other terminals.
kitty is a great terminal, but it's one example of fast not being also lightweight.
time xterm false real 0.052 user 0.035 sys 0.000 maxmem 9 MB faults 1
Doesnt look like an order of magnitude to me.
mlterm -e false 0.08s user 0.02s system 84% cpu 13Mb mem 0.125 total
kitty -1 false 0.22s user 0.05s system 93% cpu 78Mb mem 0.290 total
(and yes, there's a kitty instance running already..)