Blair your view of what it takes to run a production 3/8ths rod is inspiring. I believe a big problem is most engine machine shops do not know how critical shot peening is, or perhaps they know how difficult it is to do properly, or they do understand and they are not willing to place the responsibility in a shot peener etc.. Your sending six or eight sets of rods at a time makes for a worthwhile job for a shot peening shop and also allows the peener to properly peen the 48-64 rods using almen strips. An almen strip is a thin strip of SAE 1070 steel used to quantify the intensity of a shot peening process. Shot peening only a few sets of rods does not allow the time and cost to be distributed over the peening operation. Peening is a science and can easily be screwed up by varying any of the multiple items and operations that make up a proper peening: velocity, hardness/size of the peen shot, metal the shot is made of, angles of the shot, duration/intensity of the peening etc..
The result of peening is seen in surface hardness and the depth of the hardness. If the surface is over or under peened it can become to brittle, not hard enough or not achieve the correct depth of hardness, as a result optimum fatigue resistance is not possible. Another thing is stock rods have already been peened at least once - this potentially double peening effect must be factored into the peening operation. Like you stated: " prepped properly, they rarely had problems. " The fact it is costly in time and skill to properly prepare "stock" rods so buying a set of aftermarket rods where those prep costs can be distributed over a production run makes for an economical alternative. When you realize a set of Carrillo rods can get into $3,000-4,000 you get an idea just how costly preparation can get.
Shot peening is one key reason to be gun shy on Chinese parts. With shot peening being a science with untold variations in the procedures the failure in any of the variations to get it right is potentially catastrophic, yet the parts lookee rightee for they are masters of making stuff look good.