"At the time of the King James Version, the only available Greek manuscripts had the final verb of that sentence as 'will burn up', and so this thought entered Christian expectations. Much earlier manuscripts that have since been discovered indicates that the original word was 'will be found'. What this probably means is that as the purging fires of God's judgment do their work, the earth and all deeds done on it will be fully exposed and 'found out' for what they really are. The same Greek word 'found' is used in a similar way in 1 Peter 1:7, also in the context of the purging judgment of fire: '... so that your faith - of greater worth than gold, which purges even though refined by fire - may be proved [found] genuine and may result in praise, glory and honor when Jesus Christ is revealed' (same word, my emphasis)." (pages 199-200)
Dr Chris Wright then cites the newer English translations, NET, NRSV and ESV, to illustrate this point. Then he says,
"So we should understand the destructive fire of this passage as the fire of God's moral judgment, which will destroy all that is wicked. In this sense it is exactly parallel to the destructive water of God's judgment at the time of the flood, which Peter uses in the preceding verses as the great historical prototype for the final judgment to come: 'By these waters also the world of that time was deluged and destroyed [same word as in vv. 10 and 11]. By the same word the present heavens and earth are reserved for fire, being kept for the day of judgment and destruction of the ungodly' (2 Peter 3:6-7, my emphasis).
"The language is the same: destruction. But what was destroyed in the flood? Not the earth itself, but the wicked people on it at the time. Likewise what will be destroyed in the fire? Not the earth itself, but all that is sinful upon it. That is why Peter can urge his readers, in view of the coming destruction, not to try to escape out of the world but to live morally godly lives in it (2 Peter 3:11), in preparation for the new creation, 'where righteousness dwells' (v. 13). Thus, we should not see in this passage an obliteration of the universe, but a moral and redemptive purging of the universe, cleansing it of the presence and effects of all sin and evil." (page 200)
(Click here for another blog post on this topic, which refers to Tom Wright's book.)