Perhaps the way forward is in Dániel's phrase "permitted optional variant of ISO15919". If we had a few more permitted variants in ISO15919, maybe we could all get on with our real work.
I may be wrong, but my earliest memory of the institutional promotion of the under-
circle for ऋ etc. in romanized Sanskrit was from the Library of Congress in the context of 8-bit MARC cataloguing. See
here for Sanskrit, and
ALA-LC romanization generally.
I don't think under-circle is specifically "European" in any measurable sense. As far as I know, underdot for anusvāra and vowels, i.e., IAST, has been the most widespread convention at least since the nineteenth century. See, e.g., the World Congress of Orientalists (Berlin 1881, Geneva, 1894) that MW referred to in his introduction (1899: xxix-xxx). See also.,
Monier-Williams referred several times, in 1899, to what we today call IAST as being "German".
I don't actually know who formalized IAST, but it does an excellent job of recording what most indologists, publishers and journals actually do, in my view. Yes, it could do with cleaning up around the edges and a bit of extension perhaps (remember CS, CSX, CSX+). But so can all the other standards, formal or informal. As a workaday description of what almost everyone does in practice, it's valuable. I wish it were a formal standard, or had been used by the authors of ISO15919; I think they were listening to the library community, not research scholars and professors.
As for ISO standards becoming freely available, I doubt that that will happen any time soon. This is a scandalous situation, and it applies also to national standards. We taxpayers pay committees to work stuff out for us, and then we have to buy the results at exorbitant prices. Better people than me have fought this battle and lost.
Best,
Dominik