But the question here isn't actually "What is the ONE TRUE STRING format that the language permits, all others to be rigidly banned by the compiler?", the question is "What shall the default string be in the core C APIs and functions?"

If you still need NULL-terminated strings, you could have chosen them, and if you knew enough to so choose, hopefully you know enough to treat them like the dangerous tools they are. Meanwhile, the core C functions and API and UNIX could have been built around the much safer strings, which wouldn't have been all that hard to upgrade to 4 bytes (or more) later. Or we could have done a UTF-8-like size encoding, or turn the default strings into linked lists if they got large, etc. It would be OK, because raw expanses of memory would still be available to you, it just wouldn't be the default.

NULL-terminated strings are the wrong default, even though they should be available to those who really need them.