Stainless contains chromium which has a high affinity for carbon. Mild steel has much higher carbon content in comparison. When the hot sparks land on the stainless, the heat lets the chemicals react more readily, thus contaminating the chemical properties of the stainless. This makes life for our poor pal GD really tough because it usually shows up after the job has been installed.
Like Jody says: "You have to keep stainless, stainless." "That should be a t-shirt, heh."
That is correct about 304 being prone to corrosion in chemically active environments. (acids, chlorides, New England)
316 would typically be used in those applications but all grades are prone to carbon contamination.