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It almost looks like rust.
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Hard to say. Could be copper. A quick test if its a copper salt is to scrape a little into a small container and add a bit of ammonia. If it turns blue you've got copper. You haven't said though if the connector on the cable is clean or shows evidence of mechanical deterioration.
Mike's suggestion for cleaning is a good one. You can use q-tips, pipe cleaners, or these foam swab heads to get inside. As to how it happened, that's a tough one. If you've been inserting/reinserting frequently, then you may simply have worn away the gold or whatever coating there is. Sometimes the plugs fit very tightly and it doesn't take much effort to knock off a 10 mil overcoat. If the unit is under warranty, I'd contact them and see what they say. Its not difficult to replace and if you're electrically inclined you could do it. Otherwise expect to see a fairly substantial labor charge plus marked up replacement part costs.
