While most of the stuff I have read on this issue says that there is no problems with grounding to water lines, I have read some documents that say that some naturally occurring metal oxides create a diode and this can result in DC current flow.
DC currents corrode, displace metal, cause leaks, etc., not AC currents. If you think about it, in DC, electrons flow in one direction causing the effects we are talking about. In AC, electrons flow in each direction equally, so there is no corrosion. Whatever is moved in one direction is quickly put back.
The code only applies to T&M work....it does not apply to contract work.