I don't get the benefit .. the only 'pro' I can think of (spaces in domain names) would be better answered by allowing a space-to-double-hyphen transcoding so

hxxp://food in chicago.com/ encodes to hxxp://food--in--chicago.com

Pros: * Domains can now have spaces

Cons: * Domains are now case sensitive * You visit a domain and it isn't reversible * The google-juice assigned to domain names is gone