Any decent publishing or html editing tools fully support utf-8 by now. It's not the tools.

Publisher and editor laziness may be a reason to be cautious about epubs currently for niche or esoteric works, but that's not the same thing.

> I bought a book set in the late Middle Ages which managed to transcribe all “þ” as “p”. Until publishers care...

The book market these days makes it challenging to do high-quality editing up front for republishing niche books in a new format. Publishers try to cut corners, outsourcing epub conversions to people who don't care and don't know what they're doing, or they OCR it, have an in-house editor (who also doesn't have a personal affinity to the subject) give it a once-over (maybe), and release it.