> From my perspective input should be encoded (converted to bytes) if it is str regardless of universal_newlines value.

I don't know the reason, but the limitation is documented:

"The optional input argument should be data to be sent to the child process, or None, if no data should be sent to the child. The type of input must be bytes or, if universal_newlines was True, a string."

http://docs.python.org/dev/library/subprocess.html#subprocess.Popen.communicate

Maybe "explicit better than implicit"?