I suppose we need to get ready to see more point-of-use heaters. The method does have it's advantages.
In "traditional" construction, all the things that used hot water were placed close to each other, and the heater was nearby as well. For example, in a recent building I worked on, the kitchen counter was on the opposite side of the bathroom wall, with the heater placed in the basement directly beneath.
Yet, today homes are not laid out that way. Bedrooms are scattered about, each with it's own bath. The kitchen is often pretty distant from the garage - a common place for the heater. Yesterday's job was in such a home, where the kitchen was the room farthest from the garage.
Do houses in the US no longer have a Laundry room?
Over here, this room is often the most central room of the house (in a single level construction).
Often the hot water cylinder would be installed in there with lagged pipes run to the various plumbing appliances.
I have also seen them installed in roof spaces, but that's a whole thread in itself.