Speaking as an engineer with about 40 years of metallurgy experience, Tom, the majority of iaito are constructed of a zinc-aluminum alloy. The remainder, to my knowledge, are made from zinc-beryllium. Both alloys were chosen because they cannot hold a sharpened edge and also will not flex as much as, say, steel. Zinc-aluminum is less expensive to work with, but zinc-beryllium tends to be slightly heavier. Zinc-tin-lead is used in specialty solders, so I really doubt that particular alloy has made it into any iaito, especially in my dojo....
As far as why they aren't made from steel, the best overall answer is that there are strict Japanese laws that restrict the use of sharp swords. There is also the weight factor: iaito are made for students who will likely eventually graduate to shinken (mogito) made of steel, but who will benefit from the lighter iaito blades while they are learning. [Trust me that my shinken outweighs my iaito by at least a factor of 1.5.] Some people say that it's also easier to manufacture a zinc-based blade, but you couldn't prove that by me - steel is pretty straighforward to work with.
As far as iaito longevity, Charles hit on most of the parts that may eventually wear out. There is also the mekugi, which is a bamboo pin that holds the blade to the tsuka - I've gone through a couple of those, mostly for safety (not a good idea to fling your blade around the dojo ). The metal itself does not contact anything other than (1) your hand, (2) the soft wooden saya, & (3) occasionally the floor . Not much chance to wear out metal on those surfaces.
Choosing a good-quality iaito from the start is, of course, an excellent idea. But as you become a more proficient iaidoka over the years, there is a good chance that you will want to upgrade your iaito more for looks than for actual function. For that reason, many senseis suggest buying a relatively inexpensive iaito when you're just starting, but that's your call. My wife's & my current iai were custom-built for us in Japan (interestingly, they were gifts from my son's Japanese mother-in-law), but our first blades were in excellent shape, & we contributed them to other dojo members, & they are still in use there today. Hope this helps.
Oh, by the way, there's a longer discussion on this over on Kendo World http://www.kendo-world.com/forum/arc...hp/t-3486.html.
Ken Goldstein
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Judo Kodansha/MJER Iaido Kodansha/Jodo Oku-iri
Fencing Master/NRA Instructor
"A positive attitude may not solve all your problems, but it'll annoy enough people to be worth the effort."