HLCbuild,

I agree with you when you say that "the ground that the manufacturer is requiring is not part of the Grounding Electrode System."

In any case, I believe that the alarm system manufacturer is simply asking that his box be reliably grounded. For some reason, the manufacturer trusts the metallic plumbing system more than the electrical system.

Are there known instances in the electrical industry when the integrity of the electrical system has been compromised?

If the ground bus in an electrical system opens up, no one may ever know about it. But if a water line breaks, it won't take long for someone to discover it.

The manufacturer assumes that the risk of the water line being modified over time are low enough for him to favour a ground connection to the plumbing system (at any distance from the entrance) over the electrical system.

For the electrician to go the extra distance in assuring that the connection is within 5 feet of the water entrance is allowing the electrician to lower the risk of the alarm box ground failing below the risk level that the alarm manufacturer is willing to take.