The terrible things in tap water is really going to vary from source to source. My citys water isnt that bad at all, and used it untill a week ago with no real problems. The only reason why I got a rodi unit is because I like not having to use dechlorinator.
Even RO/DI water has its drawbacks though, like making the water too soft. Then there are people who mix rodi and tap 50/50, and a lot of them dont have any massive issues either. If tap is really that big of an issue, a mature refugium with an ATS or a macro setup will absorb most of the crap that comes out of your tap. Hell, macros will even absorb iron and copper. So rodi water isnt the only answer, its just one solution among many.
Crushed coral isnt a bad substrate. If it is causing problems with ammonia spikes or nitrite issues, then its nothing more then poor husbandry. Sure, its easier to just use "oolite" grade aragonite. Problems will stem from just about everywhere in this hobby where their is poor upkeep and maintence, so sand isnt into the clear.