That's a fair point - I think it's acceptable to throw an error in the case of *already decoded* characters that haven't been read.

There's also a discussion on python-ideas about an explicit API for clearing the internal buffers, and pushing data back into a stream. If that is added, then set_encoding() would be free to error out if there was any already buffered data - it would be up to the application to call clear_buffer() before calling set_encoding(), and deal with an such data appropriately (such as calling push_data() with the results of the clear_buffer() call)