Subsumption seemed like a cool idea when it was introduced, but it turns out that it does not actually work.
Brooks' Roomba is an expression of that model. The Roomba has a few simple behaviors - go in straight line, spiral, follow wall - and a state machine to switch between them. It has no idea where it is. Most later robot vacuums have actual navigation, because Roombas are notorious for getting themselves into the same traps over and over. Both overplanned and purely reactive systems have trouble coping with the real world, but they fail in different ways.
I presume you mean Latombe? http://ai.stanford.edu/~latombe/
> This is an extreme position, but the planning and re-planning people were having trouble coping with the real world.
Yes. The whole field wasted decades running afoul of Ron's First Law: all extreme positions are wrong. This is why the three-layer architecture described in the link above (reactive behaviors sequenced by a state machine informed by a deliberative planner) eventually became the de facto standard, because it combines both approaches in a way that actually fits the structure of the problem.
But it isn't. In order for two layers to interact properly you have to specifically engineer them that way. If a higher layer starts or stops subsuming at the wrong time you can get catastrophic failures.
Also, smart houses are a very different problem than autonomous mobile robots.