I remember reading an Ontario report that took an in-depth look at knob & tube wiring. The report confirmed what I had always suspected: it's not the wiring method itself that's the cause for concern.
Instead, the study found all manner of problems with circuit 'improvements' and other consequences of an overall inadequate system.
The most obvious was degraded insulation, due to either overfusing or simply putting too large a bulb in the fixtures.
Then there were the three-prong receptacles on circuits without an equipment ground.
Naturally, it was fairly common for some romex to be spliced into the system, usually to add outlets or as an easy way to bring power to a remodel. Apart from the ground wire question, there was the manner of splicing.
Covering K&T with insulatio was so common as to be the 'norm.'
The issue isn't with 'knob & tube' per se. I've seen houses with perfectly fine K&T. The problem is that our lives typically require a lot more power than they did in the 40s, and the basic electrical design of the residence is
no longer adequate.
As an example, my place in Reno was perfectly happy being served by 30 amps and two circuits - for the entire place. Were I to rebuild that same place today, code would require a 100 amp service and at least five circuits; a sparky would likely up that circuit count to a dozen.
In a like manner, the place was wired with but four duplex receptacles and two single receptacles. If built under today's rules, that same house would require at least 16 receptacles (and the sparky would likely install 21, all but one duplex.
Associated with the K&T is the issue of the service; while it's another topic, there's a much greater push to replace the fusebox with a modern breaker panel.
