Earlydean, there is merit to your reasoning. Another site has gone round-and-round on that very point, as applied to dishwashers. Even UL had been brought into the fray, with pronouncements worthy of the Oracle at Delphi.
The major failing of uses of flexible cords is the inadequate connection of the cord to the appliance. The cord does not have sufficient strain relief, or protection from abrasion.
I must admit that I have never seen a 'full size' electric water heater connected using a cord and plug. I have seen many small under-sink models so connected. I believe these small 120v 'hand wash' water heaters are sold with the pigtail installed.
Gas water heaters are another thing; I have seen electric igniters connected only with cord & plug.
