Insane can be done, but I don't find it very "comfortable" at all.
By "comfortable", I mean that some of the missions really don't feel right with it, they feel kind of awkward.
Technically by doing Insane, you're not cheating anymore, as your ship will be the way it should and not made better than it should be. However, when you look at what you're often up against, it starts to sound just downright "Insane" in a lot of cases.
That being said, I always thought it would be interesting to have an alternative "balanced" difficulty, where your ship would not be given any advantages but at the same time the amount of enemies would be reduced somewhat to more reasonable levels, making individual confrontations more exciting without cranking overall the difficulty up by such a large degree, like a sort of step sideways rather than a step up from Hard.
Though maybe someone has already made a mod for that but I never heard of it.