This is a rather major issue. As you pointed out, plastics etc don't cope well in space. That said, there are numerous insulator materials which will do just fine. But atomic oxygen and solar radiation degrades many substances exposed to space.
But this is really only an issue for external wires that require insulation... So let's look at the challenges as detailed by NASA:
- Arc tracking
- Thermal decomposition
- Microbial growth
Of these, arc tracking is the most relevant to cables in vacuum, and NASA have looked at the effect of ageing on this issue.
- communication wiring: in general you'd want this inside, partly for ease of maintenance, and partly for the slight additional shielding the capsule walls give against stray particles and interference. Electrical comms is expected to be replaced with optical comms in future anyway.
- power wiring: most of this will be internal, except for connections to solar panels etc. The insulation requirements here are relatively straightforward, and can be delivered with a range of solutions from plastics and ceramics to none at all. (Although ceramics are brittle, so have their own challenges during launch...)
The specification for cables such as the FCC connector to solar panels etc is for a 15 year exposure to atomic oxygen and 15 years elapsed exposure to the sun (10 effective years)