Steve,

I think there may be some value to a wet/dry for a FO tank. If you are running a skimmer, which you should, then oxygenation by the wet/dry shouldn't be an issue. Additional circulation, especially across the top of the tank will also help oxygenation. Yhe blue stuff you are referring to is filter media I assume. It acts as a physical filter and will greatly help nutrient export. The problem most people have, and you apparently do not, is that they don't change their filter media often enough. I recommend at least once a week. If its left much longer than that the organic material breaks down and is released back to the water.

The downside to a wet/dry is that it produces nitrate as a result of biological activity. That's OK for a FO tank, but not for a reef tank. You need an anerobic zone or macros such as in a refugium to either use the nitrate or complete the nitrogen cycle.

Gary