Overload protection could be handled by the main in the load side panel in the house. You are basically only looking for short circuit protection from the outside service OCP.
If the inside panel was MLO I can see your concern about the trip curve when the feeder was sized by 310.15(B)(6).
I suppose the answer would be in the breaker trip curve graph.
As for rust, We have a far worse problem with that here. That may be why plastic enclosures are becoming so popular.
