While this was wired to meet the National Electrical Code, it is still a terrible way to install electrical outlets. The way your outlet was wired is that ALL of the downstream outlets current draw is going through your crispy outlet. The nasty side effect of wiring outlets this way is that if you have a problem with one outlet, them all of the downstream outlets get FUBARed.I have been finding electrical issues in this place since I moved in. My wife was living here when I met her. She says that there were electrical problems (mostly breakers tripping) since she moved in and the builder had to come back a few times to rewire things.
The proper way to wire outlets is to install pigtails so that current for downstream outlets goes through the pigtail connection and not through the outlet. The outlet is, so to speak, off to the side and out of the main roadway.
As terrible as your outlet installation is, it still could have been worse. Imagine your outlet being wired the way it is but instead of using the side screws they used the notorious “back stab” holes in the back of the outlet. These back holes are notorious for the internal spring to lose its springiness over time and the wire connection becomes wonky. Again, all of the downstream outlets get FUBARed.
More good news; all of the other outlets in your house were wired the same way.
Now I was an electrician for six years in the Navy. One of the things that I was always fond of telling my subordinates is that a fuse blowing or breaker tripping isn't a problem, it is a symptom of a problem.
Here are a few of the problems that I have discovered since I moved in:
The most recent one was the fire. I rewired that receptacle with pigtails and wire nuts. The problem that caused it was that the electrician who installed power for the hot tub simply tapped it off of the same circuit as the plug that just failed. Not technically an overload, the hot tub should still be on its own circuit. The good news is that I have wanted to convert the tub to 220v, but the wife didn't want to spend the money. She is OK with it now, and the electrician will be out this afternoon. I could do it myself, but this job looks like a PITA with the way that the wire has to be run, so I will pay someone the money to do it.
A few months ago, I did a project where I mounted the TV on the wall. While doing that, I had to install a plug in the wall 5 feet off the floor. I intended to just tap off of the plug that was below that spot. I turned off the power and then checked it with a voltage tester. It was still hot. It turns out that box was powered from more than one breaker. For obvious reasons, that is against code. One breaker supplied just that plug, the other breaker supplied 5 others. It was easy to split the circuit. Now the TV has its own breaker, and the other five has the second.
I have a good story about a set of faulty circuit breakers in the house, but I will save that to be its own post.