I’ve been listening to the record a lot lately, esp. on headphones, and I just don’t buy it. I’ve owned and worked with all manner of tape systems, and Nebraska just doesn’t have the sound of cassette 4-track. I think it’s part of the mythology of that album and careful publicity that was done on behalf of Springsteen’s record label and marketers. What I might be willing to believe is that it was recorded on a 4-track open reel machine, maybe 1" tape or something like that.
I just assumed it was a high end Fostex type system with metal tape and possibly a DBX type noise suppresion instead of the typical Dolby.
Throw in your average $10,000 microphone that I’m sure Bruce has laying around the house along with pro grade audio peripherals (baffles, headphones, etc) and its quite possible that he kept the noise and flutter gremlins to an acceptable minimum.