gfretwell: It might be an issue that the insulation degrades faster when wet, as well as faster when hotter. Both hot and wet and the degradation could be greater than the accepted level. But while wet, drop from hot to not so hot and you're back at the acceptable level. This is just a guess. It might really be some other reason entirely. But based on my study of chemistry three decades ago, it is a very plausible effect.
Also, in a confined space, the water is not going to be carrying the heat away unless it goes away. If the space is tight, like solid conduit, the water is not really a factor because it just stays there as hot as everything else. Get the temperature above 100C and you have steam, and pressure, and some will go away, carrying some heat with it. But this process stops when the vapor pressure equalizes, and you still have 100C destroying your insulation.
To have water cooled conductors, you'd have to arrange for the water to literally carry the heat away. Pumping water through could do that, but that requires special piping.
