Trumpy,
I've never heard of a chemical reaction between PVC sheathed cable & alkathene pipe.
The method you describe is very common here, where people want to 'save on the expense of steel wire armoured cable' buried direct. It does seem to be preferable to electrical conduit, as alkathene pipe is much heavier gauge (better mechanical protection) & available in longer lengths.
In the UK plastic conduit is sold in 3Mtr lengths, so would require jointing underground.

Could the chemical reaction you are thinking of be between polystyrene & PVC sheathed cables. That is very well known in this country. Plasticiser migrates from the PVC to the polystyrene & can result in the PVC becoming less flexible & sticky on the surface.
I have seen a lot of examples of this in installations carried out in the late 70's, early 80's, where expanded polystyrene sheets were used to insulate the walls.
You pull out a cable to do an alteration & it comes out of the wall sticky & soft on the sheath.
Nowadays we have to enclose cables in UPVC conduit(which is unaffected by contact with polystyrene) where polystyrene insulation is used.
However there are still thousands of buildings contructed before it was widely known about the PVC/polystyrene reaction, that could be a time bomb waiting to happen.

On the subject of supplies to outbuildings, I usually install steel wire armoured cable (sometimes in an alkathene duct) as it is not really expensive, & can take a lot of abuse.
Do you not use SWA for underground supplies in NZ?