The barrels would not be really insulating. For insulation you need dead air space. Think of fiberglass pink. The spun glass has millions of tiny pockets of air that can not transfer heat through them. There would be too much convection within the barrels, transferring cool air or warm air where and when you don't want it, so... not insulating. On top of this, with this configuration you will probably have condensation issues with thin steal and cold air/warm air contacting it. And I see that Ralf came up with similar thoughts as I type this.
Thoughts regarding insulation: With the barrels sealed up, straw stuffed in the gaps, and a plaster finish over the whole works, it might make for a pretty insulative wall. The barrels are steel, which conducts heat pretty well,,,
I would think it would be best to fill the barrels. They would definitely not expand and contract as much with the cob buffering the temperatures but imagine on a cold night with cold cob on the outside contracting and cold steel on that side, and on the other side, warmed to room temperature warm cob and warm steel. Sounds like condensation to me. Now add sawdust (insulating but with some mass potential) or sand (more thermal mass but also insulating to a degree), and the barrel is turned into a more singular cohesive unit with the cob on the outside. If you don't have that relatively solid nature to the wall, you are going to have condensation. I would go with sand and stick with more of a thermal mass/inertia house than the sawdust insulating house, for this simple reason: Sawdust will settle more than sand, and the space in the barrel tops will have condensation.
gaps filled with cob, cob walls covering the inside and out, with a roof overhang for protection.
Would they still expand and contract? Wouldn't the cob insulate them from that?
Would they still need to be filled with something? How about sawdust ?