IIRC, the main problem with aluminum wiring in residential applications was the failure to apply antioxidant compound to the bare wire ends when installing into a breaker, receptacle, switch, etc. The thermal expansion/contraction cycle of aluminum allows for intermittent contact between the wire and its corresponding terminal. This air gap will grow a layer of aluminum oxide, which increases the electrical resistance of the junction and, consequently, the heat produced as current flows. After a few iterations you either get broken contact or a thermal runaway and fire. The antioxidant paste (NoAlox is one name that comes to mind) prevents a layer of oxide from forming by not allowing air to touch the bare wire.
Modern receptacles and fixtures often also have CuAl stamped or engraved on them, meaning they can also be used with aluminum wire. Their coefficient of thermal expansion matches that of the aluminum wires, which reduces the amount of air gap that forms upon heating. If properly installed (correct fixtures and antioxidant paste), aluminum wire can be safely used in residential settings. In fact, the main feed from the power pole into the house is often aluminum wire.
Contrast this to a typical automotive environment, where vibration, heat/cold cycles, corrosive environments (road salt), and (sometimes) exposed connections with no ability to retain antioxidant compounds make aluminum a non-starter.
