I suspect that spiking giardia cases has to do with reduced numbers of people naturally immune as municipal water became ubiquitous, a lack of exposure in childhood, and an increase in sensitivity of medical diagnosis.

It isn't just giardia. Most westerners who visit Mexico are prone to getting "Montezuma's revenge". Natives have developed immunity from long exposure to the native pathogens.

The up side of treated municipal water is safety and a smaller infant mortality rate, and both children and adults can freely enjoy water that is both cheap and quite safe. The down side is that you're digestive tract remains unchallenged by disease and may remain potentially naive. If/when you emerge from the treated water bubble and are exposed to diseases you will have little to no immunity and will like have a rough time adjusting.