I let people keep what they can, and if they want to, for the sake of finishes, and necessity. But within reason due to loading, code, and applicable purpose. A case by case basis.
The purpose of the EGC is to bring the exterior metal of appliances and fixtures, or other potential contacts to the same electrical potential of other items that would also be grounded. Water, gas and drain plumbing. Foundations, footings and slabs. HVAC duct work, and structual steel. CATV, Phone and network wiring.
Not all K&T is un-grounded, often you open the wall and find that it is, and still intact, or had been grounded to plumbing as was allowed right up to 1993.
3-wire K&T originally wired that way, or converted in prior work is a hazard IMO. For a few reasons other than just what some might see as a fear of MWBC's. 1.) wiring not intended originally to be 3-wire should all remain phased the same IMO due to possible additions that have been done prior. And 2.) during the period of time that 3-wire K&T was allowed to be originally installed was a horrible time for workmanship so I have found, coincidently it coinsides with thermoplastic wiring. I all too often find unsoldered splices on wiring of this period. Not to mention the 3-wire circuit was a new thing to the persons installing it, as prior to that, no 3-wire general purpose circuits were allowed past the panel unless it was for equipment, or so it seemed.
Well more than 50% of plug and cord items in the home do not require a ground outside of kitchens, baths, and garages. If polarized outlets are all they need, why change them? Surface lighting too if the load is not changing. If given the choice to ground the existing wiring, or to re-run new, I would opt for new. But not out of my own necessity. However if asked to convert say a K&T light to 20 cans - no due to increased load. Keep a kitchen or bath in K&T - no due to grounding and load... Put a light in the shower - No due to grounding. Add a bunch of outlets for a home office - no due to load and grounding. Add a bunch of outlets for the sake of convieniance - yes I'll keep the existing wiring. Add a bunch for the sake of having multiple places to plug in space heaters due to the lack of proper heating the building then definately no...
If there were evidence of deteriorated insulation, it too would be an option for repair or replacement - depending on the cause. "Hack wiring" of any age would be the same - repair or replace.
If the customer is not adding insulation, or load, or requires a ground for a specific reason - why replace one 15a circuit of X amount of load for a new circuit with X amount of load with an unused EGC? If they have the walls open that is one thing, but if not that is an unnecessary multi-trade change order IMO. If you were to say go price a service up-grade here, and also demand that the customer re-wire the whole building due to the presence of K&T, you: 1.) May not get the job. 2.) Could be explaining to the license board as to why you're pushing for unnecessary work. Who may or may not see it as justified as you thought it was. If the customer wants it changed, that is another story - but you can't force it upon them unless there is a reason.
Short soldered splices in black iron pipe... Just re-pull it. Easy money...
