This appears to be the preferred way to do climate control, even in the most expensive of houses. Each room gets an air-handling unit. Multiple air-handlers can be attached to a single compressor, and the holes through the walls are quite small, so the system is quite flexible.
It is the height of extravagance to leave the thing on when you're not in the room. Even very rich people shut off the air-conditioning when they leave the room, and turn it back on when they come back, so they are only cooling the rooms they are in. The air conditioners are quite powerful and lower the temperature very quickly, even in places like Thailand or Singapore. This also means that the hallways between rooms can sometimes be quite warm.
As for water heating, the vast majority of water heaters in Asia are point-of-use. The modern ones come on automatically when you turn on the hot water, and there's a lag which is shorter than that one expects from a central water heater here in the States.
I've often thought about implementing this water heating solution here in the States, possibly combined with a central water heater somewhere to bring the water temperature from cold to warm before it reaches the point-of-use heaters, but not so hot as to lose significant heat along the way. digitalemur says that this idea would work best with a low-cost central heating system, like a solar water heater.