"I've Got City Water"
Water is treated in the city, but approximately 2% is for in-home use. No doubt this water meets or exceeds EPA standards.  The other 98% is for fire fighting, industrial use, etc. 

Now let's say that the city treats this household water to an extremely high degree. It would still need to travel through miles of pipe that was installed who-knows how long ago?

It's easy to see how more water treatment is necessary when water enters your home.  The city could do it, but your bills would go through the roof.
 
"We Get Our Water From a Well"
Our drinking water is being destroyed. Did you know…

• Every year at least 255 million metric tons of hazardous chemical wastes are dumped into our nation's environment?
• There are 400,000 landfills, ponds, pits and lagoons in the U.S. containing some of the most dangerous substances known?
•  There are 35,000 pesticides that are made from 600 chemical compounds – all potentially winding up in our water supply?

What is water tested for?
Some common problems with water include the following:

Hardness of Water - Unsightly water spots on fixtures, glasses and silverware are also caused by hard water. The hardness creates soap curd which interferes with the cleaning ability of your cleaning products and causes problems such as bath tub ring. Plus, scaling builds up with hard water, and can clog pipes and fixtures.

Iron - Higher concentrations of iron can cause an objectionable taste and rust-colored staining of sinks, commodes, bath tubs, other plumbing fixtures and clothes.

pH - Low pH water (acid water) can cause damage to sinks, faucets, hot water tanks, drainage and supply lines. These problems can cause extensive repair costs or replacement.

Sulfur - Sulfur causes damage to plumbing and gives off an offensive, "rotten egg" odor.

Chlorine - Chlorine is found to be objectionable in drinking and bathing water.  Chlorine that mixes with organics in water, forms trihalomethanes (THM's). THM's are reportedly cancer-causing agents.