It should be fixable. In general, Unicode in the console is fine, but the CRT doesn't handle it well (as shown by the _setmode extension being able to fix it).

The 'correct' fix for Unicode in the console is at http://www.siao2.com/2010/04/07/9989346.aspx and it basically comes down to "use the Windows API and not the CRT". It's certainly fixable here, though the general fix for Python itself is more difficult because we want/need to expose the bytes interface as well (that said, #1602 seems to have a good fix right now that just happens to be easily distributable as pure Python code, so there's little motivation to merge it in, especially since it will break back-compat).

I don't know entirely whether _setmode is a correct fix here, or if the attached patch is sufficient, but it can be fixed.