Registration of Cyrillic domains in the SU zone

I quote a letter that just came to me from one of the registrars:

Since April 28, 2008, in accordance with the decision of the Supervisory Board
of the Internet Development Fund, amendments to the regulatory
document “Regulation on the registration of domain names in the SU domain” come into force , namely:

restrictions on registration of domains with the prefix xn-- are removed, which
will allow start registering multilingual domains in this zone (of the form “name.su”).

The cost of registering multilingual domains will match your
current cost of registering SU domains.

Only domain names with the “XN--” prefix are subject to registration,
which when converted using the PUNYCODE algorithm have
a domain name representation consisting of letters that are only
into one of the used UNICODE standard tables
and / or the numbers “0”, “1”, “2”, “3”, “4”, “5”, “6”, “7”, “8”, “9” and / or the signs “-” (hyphen).

If I understand correctly, this is bad. Is it bad after all?