There is a long-standing conundrum in interstellar dust studies relating to the discrepancy between the time-scales for dust formation from evolved stars and the apparently more rapid destruction in supernova-generated shock waves. Aims. We re-examine some of the key issues relating to dust evolution and processing in the interstellar medium. Methods. We use recent and new constraints from observations, experiments, modelling and theory to re-evaluate dust formation in the interstellar medium (ISM). Results. We find that the discrepancy between the dust formation and destruction time-scales may not be as significant as has previously been assumed because of the very large uncertainties involved. Conclusions. The derived silicate dust lifetime could be compatible with its injection time-scale, given the inherent uncertainties in the dust lifetime calculation. The apparent need to re-form significant quantities of silicate dust in the tenuous interstellar medium may therefore not be a strong requirement. Carbonaceous matter, on the other hand, appears to be rapidly recycled in the ISM and, in contrast to silicates, there are viable mechanisms for its re-formation in the ISM.