Over heating a tank...unlikely...
Burning down a house, I have never heard of this ever happening.
First off, companies design these heaters not to cause harm. I believe if heaters do malfunction, they will do so by shutting off. There is a little lever (solenoid) inside the heater, and when the heater is activated, the lever closes by applying an electrical current which closes the circuit and turns the heater on. If the heater malfunctions, the lever will not be able to move to close the circuit, to turn the heater on.
Burning down a house, well, the heater is inside a tank, and the last time I checked water puts out fire...
...hope I did not sound mean right there.
The only way I can see a heater, or any electrical unit for that matter, burning down a house is if water can get down in the outlet causing a short, which could trigger a spark and possibly a fire.
-FHM