Arguments I've heard about using steel cased ammo in a firearm:
Increased Chamber Wear:
This is highly unlikely. As EC pointed out, the case hardness is still much lower than the barrel/chamber hardness. Any increase in wear from inserting/extracting is likely to be "in the noise" compared to throat errosion from the hot-gas jet following the bullet out of the case.
It's actually possible to get hardened brass (not the type used in cartiage cases) harder than most steels. The imfamous "Cop-Killer" bullets were hard machining brass bullets with a green teflon coating, the later added because the brass was harder than most barrel steel. Media pressure caused congress to make teflon coatings illegal.
Chamber/Bolt contamination Due to coating:
While I've heard support for and against this, it is possible that the ploymer/laquor coatings used on steel cases may deposit on the chamber and result in chamber or bolt contamination. This would also likely vary from manufaturer to manufacturer as they use different coatings.
Note: I've seen some bolt-face / firing-pin contamination from military primer sealant (visual) but never seen it built up to the point of interfering with operation. Anyone seen this interfere with operation?
Lower Expansion / Improper Seal:
Totally have to aggre with EC here. If the case weren't expanding to seal the chamber, you'd know very quickly since the bolt face isn't sealed and you'd have a hot gas jet coming out of the chamber back at you. Also, it's very hard to imagin that even a low-pressure 19k-psi round wouldn't expand the steel case the few thousands of an inch of clearance.
Steel will generally have less less spring-back than brass (and so does alumimum) so the ejected case will tend to be slightly larger with steel or aluminum verse a brass case. This "could" result in higher extraction force being required to remove the round, but again, I suspect this is minimal unless you're considering a minimum spec "Match" chamber.
As for why a range might ban Wolf ammunition:
A lot of Eastern Block and Russian ammunition manufactueres used bi-metal (copper clad steel) or copper washed steel jackets and/or steel cored bullets. All of these increase the wear and tear on the metal back-plate verse copper or guilding metal jackets.
Also, scrap metal dealers are going to offer less money for mixed metal scrap verse brass scrap, so they may be trying to increase their return on their floor sweepings as well.