> I'm not sure why anyone would choose varchar for a column in 2026

The same string takes roughly half the storage space, meaning more rows per page and therefore a smaller working set needed in memory for the same queries and less IO. Also, any indexes on those columns will also be similarly smaller. So if you are storing things that you know won't break out of the standard ASCII set⁰, stick with [VAR]CHARs¹, otherwise use N[VAR]CHARs.

Of course if you can guarantee that your stuff will be used on recent enough SQL Server versions that are configured to support UTF8 collations, then default to that instead unless you expect data in a character set where that might increase the data size over UTF16. You'll get the same size benefit for pure ASCII without losing wider character set support.

Furthermore, if you are using row or page compression it doesn't really matter: your wide-character strings will effectively be UTF8 encoded anyway. But be aware that there is a CPU hit for processing compressed rows and pages every access because they remain compressed in memory as well as on-disk.

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[0] Codes with fixed ranges, etc.

[1] Some would say that the other way around, and “use NVARCHAR if you think there might be any non-ASCIII characters”, but defaulting to NVARCHAR and moving to VARCHAR only if you are confident is the safer approach IMO.