Comment by rob74

The first "punycode attacks" were using letters that were completely indistinguishable from the "real" ones (e.g. by using Cyrillic letters). I guess the assumption is that the user would be able to identify any letters with diacritics (even if they're indistinguishable from specks of dust on your screen) and avoid them - after all, you wouldn't go to "göogle.com" either?