iRule - wrong variable definition ?

You should also set a "default" for your switch which set your variable to "down" or something else other wise you will get TCL error when the remote IP doesn't match one of the networks you define in your switch.

when DNS_REQUEST {
    switch [IP::remote_addr] {   
        "10.10.1.32/27" -
        "10.10.1.64/27" -
        "10.10.1.160/27" -
        "10.10.1.192/27" {
            set status_vs [LB::status vs Client_Monitor_VIP]
        }
        default {
            set status_vs "down"
        }
    }
    if {$status_vs equals "up"} {
        host 1.1.1.1
    } else {
        host 2.2.2.2
    }   
}