Vt220 supports non-ASCII chars. It would be useful to use the Unicode equivalents internally and map them to an encoding the terminal recognizes on output.
An absolutely mindbending amount of effort was expended back in the day trying to make terminal handling work in a portable way. People today think that having to support five different browsers is hard. Imagine a market populated by like 50+ different hardware terminals with only vaguely overlapping features and spotty standards compliance.