I could be wrong, but those instant on hot water heaters are ideal for these situations. especially spacewise.
In travel trailers, the hotwater heater can be as small as 6 gallons.
edit: also, navy showers.
Im thinking of this thing more as a home that will stay fixed most the time, than an RV. If its someones home, you want as much comfort as possible.
That does not include navy showers