The Shun Classic rod is very fine grooved steel.
Fine grooved steels are useful for honing edges which not only need truing, but can use a little bit of scuff (aka scratching). Scuff adds micro-serration, which can compensate to some extent for dulling caused by wear. Eventually though, edges get too worn to be refreshed by the amount of scuff you can get by (properly) using a fine grooved steel.
This is true regardless of whether your knives are carbon or stainless. However strength/toughness do play a roll; and given that fairly high hardness carbon alloys tend to be tougher than fairly high hardness stainless alloys it's easy to generalize that carbon will hold up to a rod better.
The principle purpose of steeling is not to scuff up the edge, but to true edges which have developed impact burrs. Although all knives will deform from impact, not all knives profit from truing on a rod hone. Very hard knives and very asymmetrically sharpened knives are usually not good candidates because their edges are relatively fragile and can easily break from the pressure a rod's small contact patch develops.
Stropping on a flat surface is another method of truing an edge. It's somewhat gentler than a rod hone, and less likely to chip very hard and/or asymmetric edges. It's less efficient than using a rod in the senses that it takes more time, not to mention more setup. Another problem with stropping is its tendency to pull a wire.
Whether stropping or using a rod hone, it helps to know what to watch for. And, bottom line, steeling is quicker, more convenient, and just as good at truing as stropping for your Artifex.
If a knife's performance doesn't noticeably improve after honing, it's an inappropriate steel; it's the wrong kind of knife; you're using the steel improperly; the knives are too dull to benefit; or some combination. Since the Artifex steels well, and the Shun Classic is plenty good enough for it, reading between the lines, I'd guess a combination of steeling technique and a too-worn edge.
Extremely high hardness is never a bad thing for a rod, but isn't necessarily important. Honing rods do almost of their work with geometry, and the rod's hardness isn't usually much of a factor unless the hone is very soft. A good hone doesn't even need to be harder than the knife. Hardness plays its most important role is in the need for a hone that's free from nicks and gouges, that's because hard knives can nick soft hones.
Ceramic and glass aren't inherently better than metal. The great thing about ceramic hones is that you can get very high quality, appropriately textured hones for a decent price. The Idahone fine (aka "1200") isn't any better than a bunch of other hones, but it is as good as anything else out there, and a helluva a lot less expensive than anything which performs at its level. But, unless there's something visibly wrong with your Shun, there's no pressing need to replace it.
0.25u diamond is far too fine as the first step in sharpening a dull knife. On the other hand, a strop loaded with 0.25u is pretty good for a final polishing of a kitchen knife as long as the knife has enough "scratch hardness" to hold the polish long enough to make the trouble worthwhile. Your knife is marginal.
Compared to other stropping compounds, diamond gives an edge the most "bite." Knives polished out with 0.25u diamond actually have more of a toothy feel than knives polished with 1u boron carbide. One of the nice things about using diamond compound is that there's nothing subtle about the knife's feel as the polish fades -- when it loses that bite, it's lost the polish.
0.25u is an extremely fine grit. It's too fine to polish out a knife which isn't already fairly well polished. Just like with ordinary water stones you don't want to make your grit-level jumps too large. So, there's really not a lot of point to using 0.25u diamond (or 0.25u anything else) unless you're already at least very close to the 1u level.
I fool around with 0.25u diamond not because I think it's really worth the extra trouble, but because I can, and because I enjoy screwing around with knives. When I'm sharpening for best performance, I stop stropping at 1u boron carbide or -- lately -- 1u CBN.
Getting down to cases, you should take your knives back to the stones, and go through whatever your kit is until you get to a good 5K - 6K edge; then see if you can't maintain that edge with your current steel. Take a look at Steeling Away
and see if that doesn't help you with your technique.
These are fairly complex subjects, and I've barely scratched their surfaces. If you want to go deeper, or if you (or anyone else) disagrees and wants to discuss it further, I'd love to.