Ele pode ser usado com a maioria e você não terá muito problema com protocolos comuns como HTTP ou SMTP, mas o Telnet é um protocolo em si e reage a alguns caracteres especiais.
Do artigo da Wikipédia Telnet:
All data octets except 0xff are transmitted over the TCP transport as is. Therefore, a Telnet client application may also be used to establish an interactive raw TCP session, and it is commonly believed that such session which does not use the IAC (0xff, or 255 in decimal) is functionally identical.[citation needed]
This is not the case, however, because there are other network virtual terminal (NVT) rules, such as the requirement for a bare carriage return character (CR, ASCII 13) to be followed by a NUL (ASCII 0) character, that distinguish the telnet protocol from raw TCP sessions. [clarification needed]
On the other hand, many systems now possess true raw TCP clients, such as netcat or socat on UNIX and PuTTY on Windows, which also can be used to manually "talk" to other services without specialized client software. Nevertheless, Telnet is still sometimes used in debugging network services such as SMTP, IRC, HTTP, FTP or POP3 servers, to issue commands to a server and examine the responses, but of all these protocols only FTP really uses Telnet data format.
Another difference of Telnet from a raw TCP session is that Telnet is not 8-bit clean by default. 8-bit mode may be negotiated, but high-bit-set octets may be garbled until this mode was requested, and it obviously will not be requested in non-Telnet connection. The 8-bit mode (so named binary option) is intended to transmit binary data, not characters though. The standard suggests the interpretation of codes 0000–0176 as ASCII, but does not offer any meaning for high-bit-set data octets. There was an attempt to introduce a switchable character encoding support like HTTP has,[3] but nothing is known about its actual software support.
Como isso menciona, nc ou socat é uma ferramenta melhor (e nc permite que você fale UDP via linha de comando), embora na maioria das vezes com HTTP e tal você possa se safar usando telnet muito bem.