Either system is pretty good. Wet sleeves are easier to replace, but depend on "O" rings to seal the lower ends to the block, and the "O" rings can eventually leak. The top of the sleeve sets down in a counterbore, which can eventually wear, and require machining, and a repair sleeve. Wet sleeves seem more prone to cavitation damage in diesels than dry sleeves, or "parent-bore" blocks. The theory is that the sleeve actually "rings" from the shock of the diesel combustion, and this vibrating causes water molecules to burst into steam, eventually pitting through the sleeve. Since the wet sleeve is somewhat isolated from the rest of the block, it vibrates more. Dry sleeves are a tighter fit, and harder to get out, and harder to replace. SOME engines using dry sleeves require that the sleeve be finished to it's final size (fitted to the piston) AFTER installation, which is an extra cost. If a piston breaks, there may be damage that goes beyond the thin dry sleeve, into the actual block, whereas a wet sleeve has no bore backing it up, to be damaged. Of course, with either system, a catastrophic failure can damage the block at the base of the sleeve. Sometimes this can be repaired, sometimes, not.
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