I've got to dissagree on the pipe wrapping, I know what the possibilities are due to too much heat being contained, moisture held against the pipe etcetera and it would make sense that this might happen.
But I have used it on the Cooper's exhaust since 1998. I heard what could happen back then but gave it a go as I could use it as an excuse to get a nice set of new LCB's anyway. I finally ditched that manifold last year after 7.5 years and replaced it with a Maniflow(I replaced them because I didn't want the crappy 3 into 1 anymore). There was no damage apparent to the pipes, no corrosion or damage anywhere. I also tried this on a WRX I owned some time ago, it had a stainless 316 exhaust, and once again no issue. The wrx did 100k with the wrapped pipes.
We use wrapped pipes on every engine the Navy uses to keep the engine room temps down. They are lagged up to 3 inches thick in the stuff at times, and being used constantly under load the AVERAGE exhaust temps will hover between 900 and 1000 degrees for weeks at a stretch. The material used here is normal steel, nothing fancy. They do fail but after a few years, and usually due to vibrations not erosion. To keep it in balance though, the lagging is sealed with a paste to keep the bilge moisture from settling in the lagging.
I'm not saying it doesn't happen, but I've not had a problem.
BTW, good 2" wide stuff can be had from Blackwoods for about 35 bucks a roll of ten meters. Plenty.
The pipes as they were removed, and without the wrap, they weren't new when I got them either, very 2nd hand:
The electrical tape was replaced with hose natty new clamps after this photo:
