What makes this "psak" particularly interesting is that it does not come from a rabbi (though maybe some rabbis are now issuing piskei halacha based on this, in one way or another). Rather, ti comes from the fire and rescue services.

This past Shabbos the fire and rescue services of Jerusalem were called into action to put out a fire in a yeshiva. The fire had originated from the sue of some sort of ad hoc "blech" - a metal sheet placed over a fire. Pots had been placed atop the blech to keep the food hot for the upcoming meals, and draped over the pots were towels, to keep the heat in.

The towels caught fire and it quickly spread. The firemen put the fire out relatively quickly, but much damage had already been done.

The fire and rescue services then issued a statement to the public saying that using an electric hotplate to heat up food for Shabbos is definitively prohibited, but using a blech is 7 times worse and 7 times more dangerous. The chance for a fire catching on the towels and spreading is extremely high and the chances are high for a fatal fire to spread. Many fires and much damage is caused regularly by using such hotplates and blechs, even proper ones, and covering the food.
source: Behadrei

I am pretty sure we hear even more frequently about fires that started from electric hotplates that shorted out or something else happened to that caused an electrical fire.

I'd say to only use hotplates made by reputable companies and to be careful to cover your food without letting towels touch the surfaces of the hot plate or blech, but the rescue services are saying that even that is not good enough and no such method should be used as they are all too dangerous. Unfortunately such a warning in basically a waste of time, as how do they expect anybody to heat up food for Shabbos, if neither a blech nor a hot plate is acceptable? If they really want people to listen and heed their warnings, they should figure out what the safe way is for keeping food hot on Shabbos and letting the public know what is acceptable, and not just what is not. As of right now, people will nto listen with every method they are familiar with being condemned and no alternative being offered.