History has several examples of the effect. The British learned that lesson after their artillery leveled an enemy town in the Crimean War---I believe it was the seige of Taganrog. The Russian riflemen used the rubble as cover to exact a toll from the British.
Stalingrad was another good example...the very best Germany good send failed...the Russians knew the city well and the rubble was a snipers haven for them to destroy the moral and leadership of the German forces...what a horrible battle!
I'm glad I read the thread before reacting to some of the initial questions/comments. Monte Cassino was the first thing I thought of, when I saw the calls to "level" the town first.