It is anglocentric and valid. I live in a country of over 300 million people almost all of which speak English. Almost half the people on the internet at present speak English and virtually all the content I could possibly want to consume is available in a non unicode domain.

For me and 300 million users avoiding malicious attempts at spoofing is important. Setting show punycode to true enables me to view pages in international domains in case I need to do this while preventing me from being exploited.

Its at present the best option for hundreds of millions of people.

Its not shortsighted or racist to acknowledge different populations of users have different needs.

Edit: In case people can't be bothered to read it should be obvious that I am advocating for shipping with show punycode true for the English US version of firefox.