So the number of possible addresses is reduced using bech32?
No.
The old P2PKH addresses that started with a 1 were typically 34 characters long.
The new bech32 addresses are typically 42 characters long.
Also...
The first character of the old addresses indicated the address type, and the last 6 characters were part of the checksum, leaving approximately 27 characters of base
58 key hash data. This leaves enough room for more than:
1.46 × 10
48 possible addresses
With a bech32 P2WPKH address, the first 3 characters indicate the address type, and the last 6 characters are the checksum, leaving 33 characters of base32 key hash data. This leaves enough room for more than:
1.46 × 10
48 possible addresses
Since the public key hash is only a 160 bit value, there are only 1.46 × 10
48 possible addresses. Therefore, BOTH address formats have enough room for ALL possible currently valid addresses.
Cheers.
Is the sensitivity of case really important? I'm sure most people use their mouse to copy and paste the address.