The problem with the on demand water heaters is that they only work to capacity when you have full hook ups. There just is no free lunch here. Without water and electric you will quickly deplete you fresh water supply {and dent your battery bank} as that 6 amp+ an hour water pump runs and runs while you await a steady stream of hot water.
At the same time, you are quickly filling your gray tank which, if you have a proper sewer hook up, will necessitate frequent trips out to the dump hose to open the valve and drain the tank. I doubt that these systems use significantly more propane {if any} than conventional water heaters but not having the electric option ultimately costs more over time {there are lots of CG's and RV Parks that provide electric even absent full hook ups. Additionally these are usually cheaper than the full hook up park down the road}.
Off the grid, the performance issues noted by the OP seem to be common. On demand systems work well in residential applications but unless you always have full hookups they have their limitations in the RV world.
My bride and I have no problem getting nearly instant hot water from our 6 gallon propane/electric water heater. It comes out of the galley faucet steaming hot in mere seconds {the water heater is located directly beneath the galley sink}. We can both take short but very hot showers back to back without exhausting our hot water.
As always... Opinions and YMMV.
:C