TMH,
You are correct that the cams will work harden. The problem is you shouldn't expect more that about 5%-10% increase in hardness by work hardening.
What Jay has said is correct about surface harening. The biggest problem is that with surface hardening, you are welding dissimilar metals together. Typically face hardening is done in two steps. The first step deposits the buildup material. This material should be selcted to allow dillution with the base metal that will minimize problems with dissimilar metal welding. The final layer is a hard facing material. Depending upon the class of material, steels contain tungsten ,chromium, nickel, moly or other alloying additions.
What this attempts to solve is that you have a base metal camshaft that is not briitle but has faces that are extermely hard (read brittle). The cams themselves could not be made of thsi hard facing material as it is too brittle and would self destruct if nicked or any thing else (try dropping a mill bit on a cement floor for a demostration...but please wear safety glasses).
What they are trying to solve is that the less than optimum material (read cheap) was used when making the original cam shaft.
There are many better ways than surface welding to achieve the optimum comination of properties in the camshaft material but they are not cheap.
Anyone interested in con ords made from materials that are better (better strength to weight ratio) than ti?? It can be done, but is not cheap.
Just something to ponder.
-Dana