The only situation this makes sense it if the default encoding for strings is changed to something different than the system wide. I'm sorry if a misunderstood this.
Exactly. Obvious example is an application in Win98 that is internally Utf-8...
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And a separate idea: wouldn't it make sense if all 8bit strings were Utf-8 internally?
It would. In fact, I think there is even the recommendation that application should prefer Utf-8 as internal encoding.
Anyway, there are legacy applications that are not utf-8 and that we need to support... And it really is not very complicated to add support for non-Utf8 internal encoding - you need ToSystemCharset[W] no matter what, all you need to do is to have some global default charset variable (SetDefaultCharset) and test
it in ToSystemCharset[W].