Why do most (all?) websites only support usernames in ASCII? Are there any security considerations if an admin decides to start accepting Unicode usernames?
While it is at all questionable why there should ever be username and not just a 'password' to identify a user, I think there's no reason to disallow unicode usernames.
What's more important, is that password to be validated as lanuguage-agnostic: it should treat keystokes regardless of user's keyboard setting. This means, "שלום" and "akuo" would be the same password. This is important, because the user often doesn't see the password characters he's typing, and they are getting severely pissed if the CAPSLOCK is on.