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Back in the olden days before there was a SQL standard, Oracle made the design decision that empty strings in VARCHAR/VARCHAR2 columns were NULL and that there was only one sense of NULL (there are relational theorists that would differentiate between data that has never been prompted for, data where the answer exists but is not known by the user, data where there is no answer, etc. all of which constitute some sense of NULL).

By the time that the SQL standard came around and agreed that NULL and the empty string were distinct entities, there were already Oracle users that had code that assumed the two were equivalent. So Oracle was basically left with the options of breaking existing code, violating the SQL standard, or introducing some sort of initialization parameter that would change the functionality of potentially large number of queries. Violating the SQL standard (IMHO) was the least disruptive of these three options.

Oracle has left open the possibility that the VARCHAR data type would change in a future release to adhere to the SQL standard (which is why everyone uses VARCHAR2 in Oracle since that data type's behavior is guaranteed to remain the same going forward).

Marc Clifton wrote:

So you're dealing with a legacy to support ancient implementations, a possible future where this will be changed, and no way to set a global configuration to change the behavior now for compliant implementations.

Yeah, that is a real suck.