If an arm or potion of a system becomes polluted or contaminated it can be flushed and, even, sterilized. However there can be a lot of time for the contaminant to move within the system prior to finding the locale and source of a problem. First the illness must incubate or manifest symptoms. Then they have to be diagnosed. Then, after diagnosis, the illness has to be vectored back to a particular water source such as home, office or short-visited establishment that was contaminated internally or from outside, nearby, utility contamination. Even then, samples must be gathered and tested.
Perhaps one of the biggest issues is that we are a society that is angered by inconvienience. Shutting down a potion of a town's water system at the first inkling of a problem will produce backlash as toilets and washing machines must stop as well. Boil Orders aren't carefully followed in instances of benign contamination during a flood.
That shouldn't be the pain in the butt it has been in years past with all the bottled water out there. But yeah, for the other stuff it would suck.