was the cable steer factory ?
I have had cable steer on several boats and never had any issues.
a photo of where the front pulley is would help a lot.
to see why it is binding like it is to cut through the guide. that is unreal.
This is an enlargement of what you have so we can see it better.
The way my '59 Crestliner is set up is the cable comes from under the bow front pulley
through the dash board. I found some nylon sleeves at Lowe's that fit the hole to
prevent the cable from eroding the wood.
the side guides do have some stress but never enough to wear through like your photo shows.
I have never seen a wear pattern only the thickness of a penny. What size cable are you using?
on the upside - if those are factory original clips - they have lasted 56 years !!!!
so, just replace them with good quality chromed brass guides and maybe you can get another
good 50 years out of them before they need to be replaced.
the 1959 wood boat I am working on now have just plain brass - no chrome.
and they have zero wear on them.