Hi Shorty,
I don't know where this aversion to rust comes from. True, if a flesh ring has no wrap, it'll rust a little on the surface, and the skin will get rust stains where it contacts the ring. But that doesn't do any real harm to either the ring or the skin. (I guess, eventually, the ring will accumulate too much rust and weaken, but it would take decades I suspect.) If anything, I think the rust helps to prevent slip because it is a little rough and adds to the friction.
Jeremy Tomasck recommends to not use any wrap at all on the flesh ring (for a flesh ring made of deformed rebar). When I first saw him do this, I was really surprised. (I'd learned to always wrap the flesh ring and assumed it had to be done that way.) But Jeremy says that it isn't necessary and my own experience confirms this. I've done quite a few djembes without any wrap on the flesh ring (and nothing to prevent rust), and it works just fine. (Some of these djembes are at extremely high tension, by the way.)
The problem with the smooth rolled steel rings is that they are slippery, making it more likely for the skin to slip. That's why I prefer to use cloth wrap on those. I wind the cloth on tightly, with enough layers to cover the ring to nearly 1mm in thickness with fabric. The advantage of that is that the cloth will give where the loops on the crown ring press into it. In turn, the skin deforms around the loops, forming a pair of depressions at each knot, which increases friction and reduces the likelihood of skin slip because the skin locks itself onto the crown ring.
Jeremy is a bit more extreme than me: he recommends to throw away cold rolled steel rings and to replace them with deformed rebar ones. Personally, I wouldn't go quite as far. But I admit that I have a preference for deformed rebar for the flesh ring. The skin shapes itself to all the little ridges on the ring, which increases friction and reduces the likelihood of skin slip.
By the way, I saw plenty of djembes in Mali without wrap on any of the rings. They all worked just fine

The ring wrap really is just an aesthetic thing (on the crown ring and the bottom ring) and, for the flesh ring, it's optional.
As to skin slip, I haven't had this happen to me in several years now. Not sure whether I'm just plain lucky--sooner or later, I'll probably have it happen to me again. But, so far, I've had a good run, with dozens and dozens of djembes without slip. The worst way to deal with the flesh ring (IMO) is to wrap it too thinly or loosely. Especially with deformed rebar, with a thin layer of wrap, the fabric covers the ridges of the ring, so the skin can't lock itself as much onto those, but the fabric doesn't have enough give to allow the skin to shape itself to the loops on the crown ring either, making skin slip more likely.
And wide rings are recipe for skin slip for sure. On drums with oversized rings (say more than a 5mm gap between the ring and the shell), it's very easy to pull the rings down without having the skin come with them.
Cheers,
Michi.