Thinning it has little to do with the wear it causes, except that it does help some of the trash fall out of suspension.
The wear is caused by metals and carbon that are dissolved, for lack of a better term in the oil. These particles are so small that you can only get them out by distilling the oil, that is why you can't get it to turn amber again instead of black.
It will run better on oil, because it is a more energy dense fuel than even diesel. That also means that exhaust gas temps run higher too, so keep that in mind. I'm not saying don't do it, I'm just telling you what may happen on the road, and what will happen eventually to the pump and injectors. It shouldn't reduce engine life, unless you melt a piston. It only reduces pump and injector life, and it really gets the injectors more than the pump.
Used motor oil actually * slightly* improves fuel lubricity, it's just the metal and carbon particles that will wear the hydraulic head over a period of time, but the injectors suffer much more, because it fouls them and the barrels and plungers get scored more easily then the hydraulic head does.
You'll also will be replacing fuel filters more often.