"What's the violation?" is actually a pretty good question. I'd start by asking: is the space behind the siding considered "wet" or "damp?"
I'm also willing to guess that this guy way on the right track....that his house was wired with only half a dozen circuits (nowhere near enough for today's home). I'd guess he's abandoned all the old wire- which may not even had a ground- and is connecting these new "circuits" through the backs of the first box in each 'run."
