[G1 General] jubeh:
But the matter is; what is it that's being erased-deleted-removed-vanished-cleaned-destroyed?

Wiping, as it currently works on Amon-RA's recovery, which I'm almost sure is the one you're using, erases these directories/partitions:

-Wipe data/factory reset: formats the /data and /cache mounts on the nand (internal memory), that means, the mount is erased and re-checked for errors and the blocks re-numbered to account for missing blocks, but this is already fixed by ext3-4 on the fly. /data holds your personalization information, saved messages, downloaded apps, phone numbers, basically, everything that means you've settled into your phone. Erase this alone, and your phone is in the same state as if it was the first time you turned it on (it'll even prompt you to sign to your google account).

/cache is used less, it only stores Browser cache and OTA updates, so this one is safe to erase, but offers no benefit (maybe only in browsing).

-Wipe Dalvik-cache: for any apk or jar in your phone that doesn't have an odex, a classes.dex file is created in /data/dalvik-cache. This file is not mutated at all during it's life in /dalvik-cache, it's not written-to, only read. It won't change, so it's not like the file will eventually get bloated.

What does happen is that if you have a lot of programs, the size of dalvik-cache will grow, but unless you uninstall the programs, there's nothing you can do about it, the file MUST be there.

-Wipe SD:ext partition: the SD:ext partition is really mmcblk0p2, and it's a symbolic link of your phone's /data/app, /data/app-private, /data/lost+found, and /data/dalvik-cache. The a2sd script moves the files from your phone's internal memory to the sd's ext partition as a means to save space in /data, but mostly so that you have more space for your apps and data (you decide the size of your symlinked space). Erasing your ext partition has the same penalty as erasing /data, again, because it's the same partition that was moved outside for larger space. Wiping it erases your downloaded apps (which you'll have to re-download), lost+found files (hardly any, really), and also wipes your dalvik-cache, which will be recreated upon boot anyway.

-Fix permissions: This one makes sense, but only after flashing a rom. Here's the thinking. Some "devs" have no idea what they're doing with their update-scripts and end up changing the permissions on several apps, which results in uid mismatches and ultimately prevents apps, or even the whole rom from starting.

Here's the kicker, the only time permission changes happen is when flashing a rom or an upgrade.

Changing permissions is not in the normal behavior of the rom, so, if you do run it, you're basically wasting your time because it has no effect whatsoever.

-Repair ext: I'll give you this one, as this one does make sense, mostly if your ext partition is ext2. Ext3 and Ext4 are journaled systems, so they do routine checks on themselves. Repair ext is an added check that doesn't hurt (because flash and nand cells do go bad every now and then), but doing it every week is overkill (unless you flash more than once per day). I'd say once a month or two is fine.

I think the real fault in your thinking (and I'm not only saying you) is that you guys are still thinking of nand and flash in terms of mechanical storage (hdd, cd, etc).

With memory, there's no seek time (except as defined by the system or medium bus), and there's no positioning of the reading head, or file fragmentation (well files do get fragmented, but it's inconsequential).

All your solutions make sense if you're running a computer with a physical, mechanical drive, but on a flash/nand/electric drive they're useless, and, in fact, the unnecessary writes lower the life of the drive itself.

The one true culprit in the decrease of performance in a rom that has been lived-in is usage. As you start getting comfortable, you start downloading apps, and a lot of those apps have listeners, and those listeners run all the time. Widgets are also memory hogs as they have to be persistent.

The only solution is more meory.

Wipe-now, and don't wipe later doesn't make much sense, if you think about it, because you're suggesting wiping once a week as opposed to wiping once when changing roms, which is a lot less frequent.