I observe exactly what I should in a properly designed system - nothing of significance. Your point.
...and you still seem to fail to understand the difference in a storage system and a demand system when it comes to sizing.
Sure I do. You are just being a wise guy!
Since the majority of gas tank type water heaters are installed in the 40 gallon size, maybe you should properly figure out the typical home hot water demand instead of overstating it. Heck, one or two short showers back to back and a 40 gallon tank heater is producing tepid water in most homes if your demand figures are accurate for the average size home.
As a comparison, even with 40 degree incoming water temperature I can get over 120 GPH of 120 degree hot water out of my modest tankless unit (125,000 BTU maximum).
Like Mr. Rat said a hundred times, if you have a high hot water demand lifestyle (AKA 4 to 5 bedrooms - 3 full baths - simultaneous showers required), then you need to size your system to meet the required simultaneous demand.
You should also note what it says in the previously linked to Minnesota summary. You, the "plumbing instructor" and his "friends" should revisit the so called and undocumented simultaneous use requirement of "the code".
Summary
• When looking at a new water heater, be sure
to compare the energy efficiency of different
models by checking the Energy Guide label.
Choose an EF of at least .64 for natural gas
and propane, and an EF of at least .93 for
electric.
• Buy the smallest size you can. Don’t try to
buy a water heater so you can shower, and
wash clothes and dishes all at the same time
without running out. Instead, plan your hot
water use. This is especially important if you
have a large family.
• Locate the water heater as close as possible to
where the largest volume of hot water is
used. Since heat is constantly lost through hot
water pipes, the shorter the pipe runs the
lower the heat loss.
• Insulate the water pipes and install heat traps
if your water heater does not have one.
• Take easy, low-cost or no-cost measures to
avoid waste in using hot water.
Copy of original Minnesota summary with typical flow rate chart: