I agree with most of what you're saying. A few things you mentioned, I think need a clarification.

I do indeed believe that a good Fluorescent Mag Particle Inspection of a set of damascus barrels (or homog steel) will provide objective evidence. I think what you're saying is; there are no standards to tell either the inspector or the evaluator what is detectable (coupons with engineered flaws) or what to do about indications of various sizes. While this significantly puts the inspection in question as to what it can detect in the barrels, it still has a fairly high level of detectability based on it's history of generic parts. What to do about indications is another matter.

Your understanding of a homogenous material's ability to sustain unlimited cycles if the stress is below the yield strength and no flaws exist is pretty close. But to clarify, this applies to steels (not aluminums) only and my understanding is that the material is said to be able to sustain unlimited stress cycles if stress typically is in the area of 1/2 the ultimate strength and assumes a pre-existing flaw just at or below detectable size (.050" typically). At least this is my passing understanding with my failing memory.

I agree whole heartedly with you that any NDI method will not guarantee any barrel is safe to shoot. It may, however, help a prudent, intellegent person, in adding another piece of information about a set of barrels in his assessment of them along with more conventional methods of inspection such as wall thickness and surface condition.