Both carbon and CRES (‘stainless’) steels can rust. The propensity to rust depends upon the amount of alloying elements, but ‘plain carbon’ is generally the worst and the 400-series stainless and similar compositions (like AUS-6 and AUS-8) are generally pretty resilient to corrosion; outside of a salt spray environment they’re generally limited to some spotting and staining, although I had the blade on a Leatherman that was kept in a PFD that I used for kayaking break due to corrosion-induced fracture.
Carbon steel that is correctly heat treated and tempered is, for its hardness, generally easier to sharpen than CRES steels, and is tougher (more resistant to breaking or chipping when used for prying). 440C that is correctly tempered is a pretty good quality stainless steel for knives, comparable to AUS-8A. Most cheaper stainless knives are made from 420 stainless or AUS-6, and are hard to keep sharp for long. The 300 series stainless that is typically used for dive knives is crap, just about impossible to put any kind of working edge on. There are tool steels like D2 which are a good combination of corrosion resistant and good toughness and edge-holding capability that are used for premium long blade knives, and a lot of exotic steels like 154CM that are found in premium production folding knives like Benchmade and Spyderco.
Cold Steel doesn’t actually make any knives; they buy knives made by other vendors, mostly in Taiwan. Their vaunted Carbon V isn’t actually a single formulation but is just their trade name for any of a number of different carbon steels they use; most testing indicates that it is or equivalent to 1095 carbon heat treated to Rc57-59, and its advertised resilience comes largely from geometry (thick blades). They’ve switch over many of their working knives, like the Recon series, to AUS-8A, and while this has created some furor, I find that they’re just about as good for any practical purpose as the Carbon V varieties. I don’t know what the San Mai III steel is but I’d guess it is similar to a high chromium tool steel like D2.
As for why their prices are so variable: their list prices are grossly inflated, and they’ll sell to a number of vendors at large discounts in volume. They’re pretty decent for production knives, and the really low end ones like the Bushman are great for ‘bag knives’ (something to throw in a tool box or kit bag for an emergency) but the high end ones are grossly overpriced for the fit and finish delivered; they get up to custom price levels without corresponding build quality. So they’re clearly playing the market with at least limited success. I’ve found it possible to pick up the Recon Tanto for ~USD70 on sale, and the SRK ~USD50, though when I bought my first SRK I actually got it for around USD30.
Cutco makes and sells crap. I just can’t say enough about how shitty these knives are; not only the steel, but the balance, ergonomics, and proportions. Most block sets of knives are pretty questionable, really intended to sell more knives than being put together for practical use, but the Cutco block sets are just junk. I actually bought a friend of mine an Ikon santoku for her birthday one year just so I wouldn’t have to use her Cutco knives. (She saw through my plan; “You’re just storing your knife in my house for your convenience, aren’t you?”)