Category sorting in MediaWiki has always been done wrong. Categories are not sorted alphabetically, but in Unicode order. I don't know when or why DEFAULTSORT was introduced, but today it is being used mostly for sorting people by surname, e.g. {{DEFAULTSORT:Wales, Jimmy}}, and for sorting other topics by another word than the first, so that the "European Commission" is sorted under C rather than E in http://en.wikipedia.org/wiki/Category:Institutions_of_the_European_Union
If you look closer at that category, you see that some items are sorted under E, which probably means somebody forgot to use DEFAULTSORT there:
* European Court of Auditors (0) * European Union Mission (1) * European quarter of Brussels (1)
What's even more remarkable is that "quarter" is sorted after "Union". This is because lower case letters sort after all the upper case letters in ASCII and Unicode. That is how broken category sorting is in MediaWiki.
Another example of broken sorting is when whitespace is compared to letters. In ASCII and Unicode, whitespace (position 32) sorts ahead of all printable characters. This means Moon illusion sorts ahead of Moonbow in http://en.wikipedia.org/wiki/Category:Moon because the whitespace before "illusion" is compared to the b in Moonbow. I'm not sure if this is correct in English, but in Swedish it is wrong; bow should sort before illusion, regardless of the whitespace.
There is a way to avoid all such problems, namely by a more aggressive use of DEFAULTSORT that removes from sorting all upper case letters (except the initial one), all whitespace and all commas. It would mean almost every article needs a DEFAULTSORT. In the examples above:
{{DEFAULTSORT:Walesjimmy}} {{DEFAULTSORT:Europeancourtofauditors}} {{DEFAULTSORT:Europeanunionmission}} {{DEFAULTSORT:Europeanquarterofbrussels}} {{DEFAULTSORT:Moonillusion}}
This can be done with bots, for sure, if we agree that it should be done. Is this something we should strive for? Has any language of Wikipedia (or Wikinews or...) already started to do this?