Use of tap water will cause mineral deposits to build up in an engine and over time decrease it's ability to transfer heat from the block to the coolant. Cooling efficiency goes down. That same mineral buildup will also clog the radiator eventually. Old coolant tends to have the same effect when it breaks down as it allows the aluminum (and cast iron, in certain cases) to corrode and rust.

Just because people have been doing it for a hundred years doesn't mean it's a good idea. I use nothing but ethylene glycol ("green") coolant and distilled water in my car.