The main problems I see are that we don't clean the insides of computer parts and we can drink water with way more calcium in it than is good for high temperature water heaters. Cooling water needs to be treated to not grow algae and bacteria in it, and a lot of times that renders it poisonous to drink. Conversely, drinking water has a lot of minerals still in it and those minerals will deposit and form scale on the insides of your heat transfer surfaces, which will severely impact performance over time. It may not even take that long depending on how hot the surface is and how hard your water is.

There should not be any contact between your heat source and your drinking water, in pretty much any modern water-heating system. You heat a refrigerant, then run it and the water through opposite sides of a heat exchanger (most domestic hot water tanks have a coil-style heat exchanger inside).

I assume whatever fluids are used for heat transfer would circulate in completely separate circuits from the water used or consumed by humans.