One reason to use a steel server cabinet for IT equipment is to ensure that any major failure is contained, so if a power supply starts blowing out sparks, it does not start a fire. In the data center, obviously, you keep paper and boxes out, since they can catch fire.
Over the years, I’ve only seen a couple of cases where home PC equipment failed such that starting a fire was possible. Once I saw a small UPS blow sparks out of the back of the unit, I’ve seen lots of components hit by lightning, and I’ve seen laptop power supplies get so hot the labels start to bubble…..but never an actual fire.
Of course in a data center, there is more power and more batteries, so that there is more fire risk. However there is typically a monitored smoke/heat detector, and a sprinkler and/or dry-agent fire suppression system.
But again, anybody seen anything actually burn?