Darren,
You've made a very defensible argument with respect to code. I have not been able to find the 12 inch requirement in any resources I have checked. I am unable to defend what I have been saying for a very long time. I hate you, Darren.
I do not have the 2002 NFGC, so I can't check their tables to see what they have to say. If you or any respondent on the thread have a copy will you look and report if the tables refer to this subject of length?
I do remember learning it in a CE course early in my licensed career and I remember it being recommended because of the inefficiencies of heaters and the bends closer than 12 inches having a tendecy to corrode prematurely.
Let's hear from some plumbers on this issue. And as for Inspectors, what does your local code say?
For a different take on the use of single wall pipe AT ALL, read this article.
GAS VENT DESIGN