It's an issue with benefit cost ratio, in my opinion. What's the benefit? Well, I don't really know... but I know the cost of encoding a ~ is rather small, so it's one of those things that I'm willing to do without thinking about it.

Now, I admit, I've done things that aren't backwards compatable with HTTP/0.9 (because there was no concept of HTTP headers in 0.9, you're not supposed to return any headers unless the request string specifies that it's HTTP/1.0 or later) ... but as Apache chokes on that, I'd have to do all of the heavy lifting, so I don't think it's worth it.

I think I supported browsers without table support until about 1999 or so. (but that was mostly because we'd connect to a page to get modem debugging info over lynx, when we were trying to set up problem connections at the ISP I worked for at the time) In that case, the cost was insignificant (I had already been dealing with HTML backwards compatability for 4 years at that point, so it came without thinking), and the benefits were measurable (shaved minutes off our time in debugging connections).

The cost of encoding the tilde may be small, but it's still more than the cost of not encoding it, and they both yield the same result (per HTTP spec since 1998). So by your own argument, tilde characters should not be encoded. :)