These things sure can take on a life of their own. Think about it guys. It's a WATER HEATER. Yes it only serves one location in the house but so what? In my house, built in '02 I have an electric water heater in a closet IN THE BATHROOM on the first floor. It's 240 volt, the elements are immersed in the water, the circuit breaker serves as the disconnect and it's not GFI protected because its not 120v.
The code does not address each individual piece of equipment. Some judgement is required.
