DOA - The fuel pressure sensor can be wired up to shut off the Nitrous as soon as there is a drop in fuel pressure which would cause a lean mixture before it occurs.
A lambda sensor can be used to give you air/fuel info and could shut off the Nitrous if the mixture leans out. There are loads of ways to prevent the mixture leaning out which all costs but is money well spent and is still far cheaper than turbo or SC.
Before installing anything I would do a head gasket with ARP studs and check the engine over internally. I would use cooler plugs and retard by 2 degrees & install an oil cooler. I wouldn't go crazy with the bhp, I would be happy ending with 280bhp, working up from 50bhp -> 100bhp shot.

From what I gather most of the time engine damage occurs with a cheap system that isn't installed properly or too high dose for revs or engine. The vr6 is good engine to do it to. People run over 300bhp reliably on standard internals. I think the kits are relaively cheap because they don't really consist of that much compared to a turbo or SC and the wet kits don't require the ECU to be mapped or a rolling road so setup costs are reduced.
I think if it's done sensibly it would be a better option for alot of people, and it would be seriously fun. Adrian Flux insure cars with nitrous. I don't think that insurance would be any more than turbo or SC.