There are two advantages to this idea. First you save energy second may not apply to everyone but it will apply to many of you. Have you ever been been in the shower when someone flushed a toilet somewhere else in the house and been unpleaseantly surprised by some extra hot water? Set the temperature of the water heater so that when you take a shower you set it all the way hot with no cold water mixed in. The toilet toilet flushing problem will go away.
our tank blew due to being rusted. We installed a tankless system like a month ago. Our tankless system also works in conjunction with a solar system. Solar system heats up the water too during the day.
Lower temperature means lower total energy so you could run out of hot water - also if you lower to less than about 135F you run the risk of having nasty stuff start growing in the tank. Other than that turning off the heat works well - we used to fire up the oil burner for 5 minutes in the morning to take morning showers and leave it off the rest of the day - saves a real lot of oil in the summer.