My only issue with this simple solution is it seems like a half-way solution to me. And after a lot of testing with paint, petroleum jelly, silicone caulk, silicone windshield glass sealer, silicone aquarium sealant and epoxy potting compound I believe I found the best solution. The stuff that works best is Max MCR epoxy resin circuit board potting compound, silicone aquarium sealant came in a close second because it's thin and flows well. The other silicones are too thick to flow a thin coating across the surface of the steel plug.
Here's how we apply the Max MCR if you want to do it yourself.
We are going to start offering pre-sealed elements in the RIMS tube kits we sell on www.kegkits.com.
But do-not fill the part up, any more than a thin layer will cause the compound to heat-up and burn when the water heater element is on.