I wouldn't consider it a defect in the optimizer; it's doing exactly what it's told to do. It cannot convert an nvarchar to varchar -- that's a narrowing conversion. All it can do is convert the other way and lose the ability to use the index. If you think that there is no danger converting an nvarchar that contains only ASCII to varchar then I have about 70+ different collations that say otherwise.
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I wouldn't consider it a defect in the optimizer; it's doing exactly what it's told to do. It cannot convert an nvarchar to varchar -- that's a narrowing conversion. All it can do is convert the other way and lose the ability to use the index. If you think that there is no danger converting an nvarchar that contains only ASCII to varchar then I have about 70+ different collations that say otherwise.