As Guideboatguy has already pointed out, pipe insulation gets squashed. Insulation is not made designed to resist sustained compressive loads.
If you use "thin" insulation it will squash to almost nothing. If you use "thick" insulation it will squash and your straps will get loose.
That doesn't mean you need to spend big bucks for fancy Thule or Yakima saddles.
A better budget option are the minicel foam blocks made for the purpose, such as http://salamanderpaddlegear.com/shop/foam-blocks
Touring Kayak Paddles
Classic Freestanding Rack
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