They are battling it out in the marketplace and one
of the IDN solutions will evolve to the point where
the market considers it clearly superior.
I think that would be the worst possible outcome.
Personally, I think that the Internet is too young
and we have too little experience with multilingual
naming to engineer an Internationalised Domain Naming
solution that solves the problem once and for all.
This means that we should be ready for more than one
iteration to get to the solution.
I have no problem with multiple iterations to get this right. I have real problems with those multiple iterations being done via the marketplace. These sorts of things need to be engineered using the correct methods (at least, as known at the time), and they need to go through the correct process. That means the IETF.
We don't let Joe Moron invent his own better-cheaper-faster replacement for SS7 and then casually bet-the-businesses/livelihoods of thousands or millions of innocent people that they got their engineering right.
We shouldn't be allowing anyone to do the same for DNS.