I'm in two minds about this.
From a political, patriotistical point of view, being able to put accents on domain names will make French speakers feel less like the language is being contorted by archaic computing system limitations, as was once the case, for example, in the heady days of 8-bit computing when getting accents on letters was something of a rare luxury.
For some users, having the accents present as in normal prose, will also simply "look more natural and readable".
On the other hand:
- in French, there are very few cases when accents really serve to disambiguate or where it is impossible to come up with an alternative version that does not require accents
- there is already a well-established use case where accents are completely optional, namely when using all capital letters; does it really matter to have an additional use case, namely in domain names, when this is also the convention?
- the Académie's spelling reform, proposed in 1990 and recently given fresh impetus, actually proposes doing away with certain accents (spurious circumflexes)
- the system will lead to a 'doubling up' of domain names; we already have enough spurious domain name duplicates, e.g. "mydomain.com" and "mydomain.org" and "mydomain.info" without adding an additional recipe for duplicates
As with the recent introduction of additional top level domains like .info and .tv, I think that overall, the system will create extra complexity in return for little benefit.
But perhaps others think differently?