Perhaps this is not so surprising. Prior to IDNs, the DNS also did case folding so "a" and "A" would go to the same place.

One of the particular challenges with IDNs is that there are two versions of the specification, a deprecated 2003 version and the current 2008 version. For a few characters they provide subtly different transforms. The 2008 version also ratchets down on a lot of non-sensical characters — they are no longer eligible in domain names. The remaining permissible set is quite conservative to limit some of the issues seen in the original version.