I've used on-demand in gas and electrical form, as well as electric element/oil boiler storage tank systems on 2 continents and that Island in the North Sea. I cant weigh in on the heat pump option but my experience has shown me that it's a "horses for courses" scenario.
I grew up in South Africa (before solar) and everyone had "geysers"- a fibeglass-insulated double skinned steel tank tank with a heating element and a thermostat. Legionella was unheard of. Solely for hot water, no heating system. They worked on mains water in urban areas and were gravity fed from storage tanks filled from a borehole in rural settings. Later on, homesteads had a booster pump fitted to the water supply coming from the tank. No filters, very occasionally an element or thermostat would need replacing. Maybe they were more economical/durable because they were only for hot water?
Off grid, I used a gas on-demand gravity fed system: a 1000L tank 7meters above the ground with an outside mounted boiler. Serviceable, was plumbed in to the kitchen and bathroom so had the luxury of hot and cold water from taps! Could only use 1 hot water outlet at a time. Probably could have done with more pressure or a lower L/m boiler. Also, building a wind guard would have helped efficiency a lot - and prevented cold water down your back in the middle of a shower!
In the UK on mains water, in older houses I have only ever had oil fired "boilers" attached to an insulated storage tank in the loft/airing cupboard for hot water and radiators. Some had a back up electrical element in the tank to supply emergency hot water (but no heat) should the boiler break/need maintainence. Newer or refurbished houses had electric/gas boilers with a storage tank, supplemented with an on-demand shower. Never any Legionella problems in single houses although there was a scare 10-15 years ago in a complex type living arrangement that shared the same heating system. I think the distance the water had to travel was an issue but don't quote me.
I've also used the really small 5-8Litre electric tank systems common in rural sheds and I find them very hungry and very inefficient. The amount of hot water you get is minimal because it's filling up as you use it -as all tank systems do- so the small amount of water in the tank cools really quickly. You may get a hand wash or half a basin of warm water. In winter, even with insulated pipes, the water is COLD so takes longer to reheat. Again, no filters that a householder had to maintain.
In Spain, because I am completely on solar with a small battery bank, high load appliances are out so that rules out both instant and storage electric systems. And no spacial heating but my Walker cookstove provides that in the winter, along with hot water. But in the summer a mass heater is out of the question! It's so hot I cook and heat water outdoors on a gas range. It's the most economical, if not particularly convenient, way for my situation in my climate. I only have cold water plumbed to my taps via a pump in a cisterna catching rainwater. This is fitted with a filter to remove debris, another to filter particles up to a certain- nano-whatever- range, and our drinking water is further filtered at the kitchen tap. Dish water is easy- boil a kettle, tip into the sink, not as fast as on demand or tank stored but reasonably timely. Hot showers is a bit more complex! Water is boiled, tipped into a 20L bucket, topped with cold water and I use an electical float controlled pump in the bucket to the shower head. I could have a gas boiler but as I can't vent it due to the house layout it would have to be outside. Here I am influenced by 3 major factors
1)wind- I've lived elsewhere in my region and had problems with flame blowout and low water temps as the flame is not constant. Even with the boiler indoors- the wind roars back through the vent and you get a cold blast in the shower. Coupled with
2)cold in winter, sub zero C temps chill the water so the max temp acheiveable is lower. My relatively small (6000L) storage tank is half above ground, directly in the prevailing wind. Also butane turns to sludge at a certain temp. You could use propane or build an insulated bax for your tank.
3) Perhaps my biggest bugbear- water and wasted energy. Unfortunately, due to the internal layout of my house, hot water would take a long route to get from the boiler to the taps which wastes energy -it cools as it travels. Also, for short usage- wash hands, rinse a glass etc. the tap is turned off before the hot water reaches it so water is heated for no reason. Water is wasted while waiting for the hot water to reach the tap. Now I would save the cold water in a bowl for rinsing when washing dishes and use the cold water to wash my hands/ rinse a cup, but unfortunately, the rest of the household hasn't worked that out yet! It used to put my teeth on edge to hear the boiler kick in, only to turn off 5 seconds later, and then again and again! I still havent found a solution for using the cold water prior to showering.....So fot the sake of my sanity, in this situation, on demand gas is out.
I was looking at a hybrid solar/electric tank system referred to in an earlier post but in winter (when I use the most hot water) I have the least sun for DC supply and lower AC power storage potential. I am trying to find out if I can attach double the amount of panels to make up for the reduced solar imput in the winter, but I'm concerened about overload in the summer-I don't understand enough about where DC current goes when it's input exceeds load. It's a completely separate system and not connected to my inverter at all. The electric element is wired to the CB.
Ideally I would a storage tank directly above my kitchen which stores heated, thermosyphoned water from my Walker Stove in winter and the DC system/AC system or, even better, a solar thermosyphon in the summer for year round, efficient access to hot water.
Each of these situations is unique to the environment, usage, financial constraints, building codes any many other factors so I don't think there is a one-size-fits -all scenario. But I would definitely think outside the box and not conform to social "norms" in any situation.