You forget two things:
1) 30 years ago, the science of Switched-Mode power supply design was less advanced than now. Plus, really cheap "offshore" PSU's were often a bit marginal even when not abused.
2) Cascading failure. Imagine you connect +12V (or -5V) to +5V, you would fry a lot of components powered from the +5V rail on the motherboard . If they then fail short, the PSU can then go into overload. Or even the PSU itself might not tolerate +12V on the +5V rail. Once caps start failing in the PSU, the high fault currents will start killing semiconductors, which could overvolt or reverse polarity the remaining caps. While there may not necessarily be actual flames, I could well imagine much smoke, and an acrid smell.