As an electrician, I can say that one difference is in the line losses from meter to house. 3 wire 120/240v systems will have the same amount of wire, the 120 v conducting on one hot and the neutral, 240 across both hots. for the same, amount of hot water heated, the losses will be double. however, with proper wire sizing, this should be so slight not to mater (code says line loss must be under 5%)
A more common problem is that 120v heaters are usually built as small as possible, to fit under counters,and such, so usually lack enough insulation. As to on demand heaters, I currently have a Takagi JR gas demand heater, ($1200 plus install- Edmonton). this heats my home and hot water, no furnace. (I now have my solar pre-heater working) When I lived in Germany, all we had was electric on demand heaters, they work great with a low flow shower. For your requirements, a 220v under sink instant hot water "point of use" heater might make more sense (most people are so used to huge demands, that they don't even look at these, like someone with a big block V8 wondering why you want a extra small gas tank for your hybrid). Some more to think about
DennisD