Hot water systems are bulky when compared to steam systems. One kg of steam carries with it 550kcal of heat at 1 kg/cm2 pressure where as one kg of water can carry 100 kcal at the maximum and useful energy can be as low as 60kcal depending on your system. Hotwater systems are more safer compared to steam systems.
For same heat capacity, generation and distribution cost for hotwater system is more compared to steam system.
As I recall, the most popular form of commercially distributing heat for heating houses in Europe is hot water. Over long distances, less heat is lost, and the flow to individual houses is easier to measure ( for billing purposes). There may be safety advantages as well.
1) If the hot water is pressurized beyond 1 atm, then the water can be >100°C. I am aware of a system that typically operates at supply = 125°C, increasing thermal capacity (but still less than that of steam).
2) Some jurisdictions treat hot water systems more leniently than steam systems. For example, the aforementioned system does not require continuous monitoring by a stationary engineer, and the municipal approvals for 'hot water' were easier than they would have been for steam.
3) It is easier at the loads to use water/water heat exchangers rather than steam/water, if the loads include domestic hot water and hot water heating.
4) Sometimes, there is more potential useful waste heat available to a system that only requires 100-125°C of supply temperature than to a system that is looking for steam as source.
