Second, the actual usefulness of any work factor has to be proven first. Do we know that the iterative approaches offer "real" work factors? What if subsequent iterations are easier to compute by exploiting the structure of the input (i.e. password + result of previous iteration). We have to prove that this is not the case. The same argument holds for peppering, which is also based on computing hashes with a certain structure.

I'd like to hear your arguments as to why certain work factors are more "real" than others, especially peppering.