These posts could be a reason to retain a conventional hot water tank since this is a potential emergency source of water.
An alternative sometimes proposed is an on demand water heater, these have their merits but have the decided drawback that they are not a standby store of water.
My friend, a plumber, tells people to put them in...only when they're doing total remodel or new construction where the unit can be installed as close as possible to the bathroom or dishwasher. They tend to lose more than the average ten degrees to tap that stand alone conventional tank heaters are known for. I looked at a few houses when I was looking for a place to live, that had them. All of them had a pressure control valve that slowed the water pressure down long enough to make it get heated. Where my house is at right now I COULD probably put in a On Demand unit. It's under the stairs, on an exterior wall. Problem is I doubt the city is going to plumb gas to just one customer. And having a nice cache of water in a tank in your house at all times is a plus for me. So I might leave it be.