It's also highly debatable as to whether the fire is even real in the first place, or rather symbolic of Mundt's tortured and dangerous inner psyche (note that the fire emerges up through the elevator along with him, and that the flames flare up when he does). The Hotel Earle as a whole seems to emulate Mundt, right down to dripping the same gooey stuff from the walls as Mundt does from his infected ear.
The fire also does something physically impossible. It continues to burn without consuming any of the walls.
Barton gets out a copy of a Gideon's Bible and opens it on Genesis. Doesn't the Gideon's bible only have the New Testament and the Psalms?