I too have heard all of the horror stories...but I have yet to experience any of them in the 20+ years I've swapped "chromies".
As far as flaking and peeling...that is indicative of a low-quality chroming job. The proper sequence is to have the wheel electostatically charged and then dumped into an acid bath for cleaning, followed by a nickel bath, and then one or more "chromium bath" stages.
A quality chrome rim can even take some abuse such as curb scrapes and wheel weight damage without peeling.
All three of my MBs have chrome rims...the ML and SL have OEM wheels and are spotless and defect free to date. The 300E was had a set of aftermarket 8-hole chrome wheels purchased by the PO. The chrome quality is as good as the OEM wheels, but they have battle scars from previous tire jockeys that weren't too careful when removing and installing wheel weights...
...it's much easier to remove brake dust grime too!
$1K is the going rate for a good quality set of chrome rims. You will probably pay as much to get your own chromed as well. There are many places that will do a rim exchange for chrome counterparts, and I found the prices to be nearly $250/rim.
Eat the $100 and get the rims from Adsit...you don't want to scrimp on MB rims. I can guarantee that any cheaper options you may find (short of someone selling some used ones) will be a dismal experience!