Capitalization rules for nicknames and name-replacing honorifics

Solution 1:

According to this blog... yes, guidance differs. "Those of you looking for hard and fast rules on this issue are doomed to disappointment." But let's agree, for starters, that it all hinges on direct address. If you side with the up-stylers, you capitalize Padré when addressing the priest because you're addressing him, and would still capitalize it if you wanted to call him "Dude." (At this point, my inner conflict between the stickler and the realist comes to blows over "Hey, You!")

It also notes, "For reasons lost in the mists of time (or at least not immediately findable on the Internet)" words like "sir," "ma'am," or "m'lady" are never capitalized. Trying to track down an explanation does indeed yield an amusing array of confused and clearly false answers. If I had to guess it would simply be that familiarity breeds contempt, and such addresses have been bandied about for so long that we can't take the time to capitalize them (let alone provide all the letters).