This is not a bug. By default, pysqlite decodes all strings to Unicode,
assuming UTF-8 encoding (which SQLite assumes when parsing statements).

To override this default, you need to change the connection's text_factory:

py> import sqlite3
py> db = sqlite3.connect(':memory:')
py> db.text_factory = str
py> cur = db.cursor()
py> cur.execute("create table foo (x)")
<sqlite3.Cursor object at 0xb7cfb500>
py> cur.execute("insert into foo values ('café')")
<sqlite3.Cursor object at 0xb7cfb500>
py> cur.execute("select * from foo")
<sqlite3.Cursor object at 0xb7cfb500>
py> _.fetchall()
[('caf\xe9',)]