Codes, and materials, really need to reflect the real world. I think a few parties have dropped the ball here.
First off, I object most strongly to the new NEC ban on NM in 'damp' locations. The ink was hardly dry on the 2008 NEC, and the home-inspector forums lit up with the 'discovery' that nearly every house is now wired 'wrong.' The reasoning? NM passes through the crawl space, which is a 'damp' location because of ground moisture and condensation.
That still leaves us with the issue of boxes and fittings. Even if someone were to run UF, the usual connectors are not suitable for anything but dry locations.
Greg mentioned the matter of insects nesting in boxes and covers. This is a very real issue, and is not addressed by any NEMA standard. Yet, anyone who has opened a fixture (usually while 20ft up on a shaky ladder) and disturbed a few thousand hornets will agree that these are "hazardous" locations!
There are likely millions of awnings, porches, gazebos, eaves, and other overhangs where NM has been in use for decades witout problem. You can wag your finger and say 'violation' all you want, but I have to question whether there's a hazard from NM getting "damp." Or, for that matter, even rained upon.
Since they went to the plastic jacket in the 70's, I can't imagine why the stuff is not rated for wet locations. I suspect all it would take is printing "NM-B" on the jacket, rather than just "NM." That is, I suspect the product would pass any test required of 'wet' location wire. The paper around the ground wire? Just try to make that wet - and so what if the ground wire gets wet anyway! Or, for that matter, just leave that wrap off alltogether, or use a mylar one (like they use in MC).
I think the code needs a reality check here.
