Probably didnt have a thing to do with his electrical system problems. You must first understand that the GEC system (grounding electrode conductor) and the EGC system (equipment grounding conductor) serve to different purposes. The gec system.. ig...metal water pipes and ground rods and other electrodes along with the connecting conductors bonding those electrodes to the grounded conductor (service neutral) in the service equipment (main disconnect) are in place for huge voltage events such as lightning and power surges. Low voltages 300 volts or less tend to not flow to earth unless it is the only path available. This is why the gec and the egc are bonded to the service neutral (grounded conductor) only at the main panel.
The egc is for human safety and provides the fault current path so breakers will trip. In a typical short circuit fault to ground the fault current travels the egc... ig ... bare wire in the romex or metal conduit back to the service neutral bar where bonding occurs with the grounded service conductor (neutral). It does not flow to the ground rod or water pipes at that point. It travels the service neutral to the center tap or xo of the serving transformer which is then earthed. This is because it provides a far lower impedance than the gec. This is what allows your breakers to trip as it accomodates the large flow of current that accompanies a short. Without massive current flow a breaker will not trip and therefore faults need a low impedance path to facilitate large amounts of current. If you were to open the service neutral making the only available fault path to the ground rod or water pipes or both it is likely that a breaker will never trip and all metal in contact with the fault will come to line voltage.
However the gec (water pipes and ground rods) will assist preventing equipment and propery damage in gigantic voltage events such as lightning where high voltage (thousands of volts and high amps) will travel to earth from the shear force of the emf.
Example: An electrical hot wire (ungrounded conductor) comes in contact with a hot water pipe after the hot water tank. The fault current travels the hot water pipe to the bonding jumper and travels to the cold water pipe. It then travels the cold water pipe to the point where the grounding electrode conductor is required to be clamped (bonded) to the cold water pipe (electrode) within 5 feet of where it enters the ground. It will not then travel the pipe to earth but will flow on the gec to the neutral bar and then out the service neutral due to the much lower impedance provided by that path. The breaker will trip and the circuit with the fault will deenergize. If that bond to the cold water pipe by the gec coming from the neutral bar in the main panel did not exist then bonding the metal piping system (hot to cold) of the dwelling would be ineffective in facilitating enough overcurrent to trip the breaker because the only fault path would be to earth via the water pipe. The impedance is too high to allow enough current flow. What you will end up with is a whole bunch of energized metal and a electrocution hazard will exist.
In the above screnario both the gec and the egc are sorta partners and this works due to effective bonding.
Hope this makes sense...kinda hard to get the longest chapter in the NEC into simple terms.
FYI...below is a dielectric union commonly used by plumbers to connect the copper pipes to the hot water tank..notice the red plastic bushing. The pipes are sweated to the brass end. Notice the corrosion on the connections to the tank in this thread. One of the reasons for the bonding jumper.
Also if a "main" metal water pipe exists and it is in contact with earth for at least 10 feet after it leaves the home it is required to be the primary grounding electrode. Ground rods are supplemental to it and at least one is usually required (if it meets the 25 ohm test).... if not then you must drive one more ground rod. If you dont have the test then 2 ground rods are required to supplement the water pipe electrode.
Your friend with the oddities would have been best suited to determine what breakers were tripping and begin troubleshooting at that point. You could remove the gec and egc entirely and your electrical system will function just fine. You just won't have safety (egc) or property (gec) protection. Both these systems are meant to not carry any current or serve any purpose unless a fault occurs or a huge voltage event effects your home. This of course assumes that the service neutral does not open.
**I would also like to point out that the hot water heater vent in this thread is in violation of plumbing codes. It has no degree of rise after leaving the hot water heater but is just a horizontal run. The 90 degree bend at the beginning is a no no.