This seriously cripples any search capabilities.

Consider:

http://api.stackapps.com/0.8/search?intitle=soapi&order=desc&sort=activity vs

http://api.stackapps.com/0.8/search?intitle=Soapi&order=desc&sort=activity vs

http://api.stackapps.com/0.8/search?intitle=SOAPI&order=desc&sort=activity

This also begs the question "How many other textual parameters are case sensitive?"

it is my opinion that there should be no case sensitivity anywhere in the API.