because the output is meant to visualize the data, not to accurately log the exact bytes sent over the wire.
Ultimately, this is the thing we completely disagree on.
The point of mIRC's debug.log acting the way it does is to avoid the extra dependency of forcing users to use a hex editor to view what was sent over the IRC server.
You wouldn't need to use a hex editor. All you need is Notepad, which can open any text file as ANSI via the drop-down box in the File->Open dialog. In any case, I don't believe Khaled made it behave this way consciously -- I think it's actually just a side effect of switching his file writing routines to encode with UTF-8 by default.
You could still see CRLFs and non printable chars in a hex editor, [...]
That's a fair point, but there are still other complications introduced such as characters having variable byte widths.