I am a Chemical Engineer in the power plant business however I don't know that it qualifies me to be an expert on this subject.... however I will weigh in.

Tap water can have a whole host of additional contaminants that can react with the heat to form deposits or contribute to corrosion. And not all tap waters are equal.... some are not too bad and some have a lot of minerals or other stuff in them that will be reactive. Mostly it will just shorten the life of the corrosion inhibitors in the anti-freeze.

Most ethylene glycol based anti-freezes (green) will chemically last indefinitely as a an "anti-freeze" property. The problem is that there are additives added which consist of lubricants (for the water pump bearing and seals) and corrosion inhibitors. Both the lubricants and the corrosion inhibitors do have a limited life and will eventually be used up. That is their purpose; to be sacrificially used to keep something from attacking your system. If you start with bad water quality you will use them up that much faster.

It is possible to add additional corrosion inhibitors and lubes to existing fluid but depending on manufacturer and brand you don't know exactly what you are getting.

I used to have a High School auto mechanics instructor who used to buy ethylene glycol in bulk and then would periodically add his own aftermarket corrosion inhibitors and lubricants and claimed that it was just as effective (and much cheaper)..... and he had many years of experience to back it up. Besides being a good mechanic he was very knowledgable with the science and engineering behind it as well.

The same philosophy goes with battery water as well.

In the lab we made no distinction between the purity of demineralized water and distilled other than the method they were made. Distilled was typically "theoretically" more pure but in the lab environment was much more expensive to use in bulk. So we used demon water.

Dave