The bearing idea isn't a solution for a few reasons:
1) Rotating bearings still have internal friction, which will still generate tremendous heat at these velocities.
2) A lot of the heat being generated here is caused by the flow of electrical current, which isn't negated by bearings. In fact, it would probably be made worse, because any spherical contact patch is going to be tiny compared to a flat surface. The suggestion of using many small bearings would seem to alleviate this problem, but the smaller you make the bearing, the more fragile it becomes.
At its heart, this is a materials science problem. You need a material that can conduct the electricity, withstand the heat, and not break down under high friction loads while doing both of these. Simply dropping in a bearing doesn't solve any of these problems
The highly conductive, non-flammable grease is just another materials challenge. At the kinds of temperatures present in a rail gun, "non-flammable" becomes a very high bar for a lubricating fluid.