I agree with André that a major problem is the lack of software support for IDNs. No end-user business wants its customers to see punycode when they visit the business's web site or receive email from the business.
Part of the software-support problem is due to developer laziness or unawareness, but part is a deliberate design decision to "protect" users from spoofing. For instance, the Safari browser on iPhones shows punycode instead of Unicode if the IDN is not in the user's language (at least, I just ran a simple-minded test and that is what I think it showed). Firefox and Chrome, on the other hand, seem to be more sophisticated in how they detect malicious IDNs.
So if you are a business thinking of obtaining an IDN, you might hesitate if a significant portion of your customer base uses iPhones, and if some of these iPhones are likely to be set to a different language.
The situation with email is gradually improving, at least for IDNs to the right of the @ sign. Unicode to the left of the @ is still unsupported for the most part.
If you are interested in learning in great detail what progress is being made, I recommend the site that André mentioned:
https://uasg.tech
They have a lot of detailed up-to-date information on which software currently supports IDNs, and to what degree:
https://uasg.tech/information/developers/
If you are interested in all the technical hurdles that must be overcome (and have, for the most part, been overcome, but not widely deployed) in order to allow unicode email addresses to the left of the @ sign, see this PDF:
https://uasg.tech/wp-content/uploads...en-digital.pdf
One other, less significant, but rather annoying obstacle to the adoption of IDNs is that Verisign has still not implemented its .com equivalents in Russian and Chinese, 6 years or more after they were allocated by ICANN!
Avtal