I still have some knob and tube wiring in my home (which is 96 years old). I've ripped out most of it over the years, but it is amazing how reliable it actually is.
I've gradually added GFCI outlets to each circuit. They're not grounded, unfortunately, but they do trip if something were to go wrong. And it allows us to plug in 3-prong plugs without using those horrible 2-to-3 adapters.
We had to change home insurance companies because Amica blacklisted us the instant they heard there was knob-and-tube wiring. A few other companies have the same approach. But it's not like homes are spontaneously combusting everywhere because of it.