To add to what Drenchenator said, the common 3/8 inch ID latex tube used for water guns generally will not burst when not abused. This, however, is not true for all tubes. Generally, it seems the higher the pressure the tube, the lower its life. I've done tests with tubes that burst after a single use. I specifically suggest against using these tubes in the LRT guide on SSC for this reason.
However, full expansions of latex tubing can case the tube to degrade, slightly reducing its operating pressure with each shot. Water gun companies limit the expansion of their bladders to avoid this problem. You can directly feel the effect of the wear on the tube by feeling it until you reach a point that you never expanded. That point will be noticeably harder to squeeze. There's no data available on how quality a tube will wear out, so do some experiments and share the results if you want to know. It won't take more than a half-hour or so to fill an empty a tube with a pressure gauge attached to see how the pressure drops as the number of cycles increases.
Also, check out
this research paper on rubber tubing expansion for more information about how these tubes expand. Some of you are familiar with Hooke's law for the force springs provide. This paper uses a more complicated model (the Gent hyperelastic model) for the rubber expansion as rubber doesn't follow Hooke's law. If you don't have a background in engineering, this paper might be useless to you, but if you're good with math then Wikipedia should be able to provide any other information you need to understand the paper.