For the opposing view, I'd argue that if an electrician re-applied the insulation via tape, I'd be hard pressed to write a violation. There is no shock hazard, the water can't get into the meter box through the SE cable and albeit a patch job it's safe.
I would not do it only because it would be a reflection on my standard. If the insulated conductors within the cable showed signs of damage, then I would be more concerned.
The safe bet would be to replace the cable for sure.
What is SEU cable? My understanding is that a long time ago (back in Greg's Time) SE cable used to have an armor on it to prevent people from stealing electricity. It evolved to an un-armored cable hence: SEU (Service Entrance Unarmored)
