If it isn't the bottom-most it isn't the last possible moment.

The problem of course is this leads to an un-unixy design where each program has to do unquoting of its arguments if necessary, rather than relying on the shell to handle all metacharacters, and this in turn inevitably leads to incompatibilities.

It's not really Unixy, but POSIX already has a kind of shared dequoting system in the form of getopt(), which handles the quoting of operands using --. Of course, this leads to precisely the kind of incompatibilities you refer to.