Any of the smart plugs or other devices plugged directly into the grid could be intentionally compromised to start a house fire. Millions of homes simultaneously catching fire would be catastrophic. Apartment buildings where a fire starts in 10%+ of the units.
The greater concern is lithium batteries catching fire while they are being charged. NYC seems to have a problem with dubious e-bikes already. If a few hundred or thousand battery controllers become compromised and the battery pack is charged with too much current it's like the bat bomb on testosterone.
This is a strong statement that probably isn’t true. The power transformers in those devices usually aren’t controlled and the things which are controlled will only sometimes be able to start fires. No doubt that some “smart” devices will have vulnerabilities that could cause fire, but just because there’s an available controller does not mean there’s an avenue to set fire to a device.
In short, unless a device is profoundly poorly designed, there’s no way to blink an LED so incorrectly that it starts a fire. (And many smart devices really aren’t doing much more than that)