> I always thought it quite weird that somehow by virtue of being in beer, that the water somehow becomes sterilised.

The reason that water in beer is sterilised is that beer is brewed — i.e. boiled.

> If you've ever tried home brewing, you'll know that non-sterile conditions lead to foul rancid filth due to all the bacteria etc.

I believe that pre–germ-theory brewing practices tended to discourage unwanted microbial activity, in part through inoculation with large amounts of fresh barm. Did they put two and two together and connect those practices in the context of brewing to the broader context of water or food safety? Maybe.

> I'd find it odd if the people then knew to sterilise the water and equipment to make beer, but then not do the same to drink it.

Indeed, the article quotes Paulus: ‘But waters which contain impurities, have a fetid smell, or any bad quality, may be so improved by boiling as to be fit to be drunk.’

Again, beer isn't boiled - as long as we're quashing myths here. It is heated.