Robert,

With regard to your first point, the question says

all English letters, both upper and lower case mixed with numeric digits

These are all a part of the standard ASCII character set and therefore would make the need for a unicode based string moot. If this were any other language then yes, you would need to use unicode but char will cut it in this scenario

As for the third point, yes, i agree. Coming more from the programmer side of the game rather than the administrative side, a couple of extra kb here and there and a few microseconds extra delay in reading it are worth it for the reduction in time taken to write the procedure. Anything that makes the code neater, easier to read and easier to write is fine by me, but I find these questions are rarely about the real world, rightly or wrongly. Don't forget almost all the questions on here are backed up by a link to BOL, hardly a source that takes into account the practical applications and is simply matter of fact about the information at hand. On this basis I guess you just have to ask yourself; what would Books Online say?