Comment 2 for bug 207779

Its not about not using utf8 as default for databases, but not for the locale.
If you use e.g. de_DE.UTF8 as locale and issue this command:

createdb XX -E LATIN1

you get:

encoding LATIN1 does not match server's locale de_DE.UTF-8
DETAIL: The server's LC_CTYPE setting requires encoding UTF8.

This is what i mean with prevents, you can't create another database on this cluster with latin1 charset like you suggested.

You are forced to utf8, even if you got some old databases which have to use latin1.
Using posix or c as locale does not show this problem.
I knew how to create a new one (take initdb script, set encoding, locale + path and its ready).
But upgrading from existing installations might fail here and behaves not like previous versions (look at debian bug report).

Found some similar debian thread:

http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=472930

Hope this helps.