We have several, myself included, that can't use CGI under 3.x because it doesn't take a binary stream.

I believe there are several alternatives:
1) Document that CGI needs a binary stream, and expect the user to provide it, either an explicit handle, or by tweaking sys.stdin before calling with a default file stream.
2) Provide a CGI function for tweaking sys.stdin (along with #1)
3) Document that CGI will attempt to convert passed in streams, default or explicit, to binary, if they aren't already, and implement the code to do so.

My choice is #3.  I see CGI as being used only in HTTP environments, where the data stream should be binary anyway.