In the days of the Temple, holiness was pretty well delineated by the priestly rituals. Certain objects were holy, certain places were holy, certain parts of the sacrifice were holy. Contrasted with this was the everyday life of the Jews where holiness was not something generally considered.
With the fall of the Temple, the Chazal made a leap of faith to replace the sacrificial cult with the prayer service. Additionally, they imbued a lot of the rituals that we perform today with the concept of "holiness", such as washing our hands prior to eating bread (a commemoration of Temple practices)
Fast forward to today, where the entire goal of Orthodox Judaism is to impart "kedusha" or holiness into every action we perform every day. But by doing this, are we over-doing it? If everything is supposed to be filled with Kedusha, do we not lose the distinction that allows us to separate the holy from the profane?
(In other words, can't a cigar sometimes just be a cigar?)