10’s of milliamps can kill you, and powerboard RCDs are set at 30mA trip. The extra insulation is mostly to protect you from shock.
I suspect the risk of fire very thin wires and AC voltage is fairly low - the wires will burn out before there is much of a fire risk.
Well, it kills 1000+ people per year in electrical fires in the USA alone. We would never allow electricity in homes like this if it were invented today.
> Such a system would need a box in the basement and lots of seperate wires to outlets.
Yes. But if high voltages can safely be used, and the system is safe in case a cable gets chafed, then the wires become super thin like headphone wires, and overall, the whole system could be produced cheaper than existing systems which use a lot of copper and plastic.
Fire is eliminated too, because a high tech solution measures power losses at every connection, and as soon as enough is unaccounted for to possibly be heating something up to the point of a fire, it switches off.
The main disadvantage is that every appliance or device needs circuitry to measure power flows. This is mitigated by the fact that voltage is variable - low power devices could simply run off 5 to 20 volts at sub-1-amp and not bother with any fancy measurement. Only high power stuff would need the high voltages and all the safety circuitry.