The pipe would not have survived the fire.
Hester Sue's hand would have been burned on that metal doorknob with a raging fire behind it.
In two episodes prior to this one, the blind school received a $1,000 reward for capturing the outlaws. This money, plus the money received in the beginning of the episode, would have covered the rebuilding of the blind school after the fire. The money was most likely burned with everything else.
When Mary is given the body of her son, it's obviously several pieces of wood, wrapped in a blanket.
Albert really doesn't have anything to feel guilty about, as the Mays boy was the one who snitched Mr. Pott's pipe and was also the one who dropped the pipe into the box of rags when Hester Sue caught them in the basement. Unless Albert talked Clay into stealing the pipe, which is unlikely, all he has to feel guilty about is not speaking up sooner about knowing what caused the fire.
Premise is shaky since Albert turned green and puked the last time he tried to smoke a pipe.