I was surprised at how cold "hot" water actually was. I thought it was 60-70, but apparently what feels "hot" is around 45-50. Especially for me, that finds anything beyond my shower's "middle" heat as uncomfortably hot, I must be showering with around 40 C water, which is basically "hot day" hot.
Going less than 55 °C tap temperature / 60 °C in the tank is bad though, at least in larger installations - otherwise, you risk legionella and other microbial infestations [1].
Then again, I grew up with thermostatic valves in the shower mixer, and a "child safety" latch to restrict it to even less hot water in normal use. I don't see why putting the mixer in the water heater is that different.
It's supposed to be HOT water, not lukewarm... I have my water heater set to 150F because it makes the hot water last longer, especially in the winter when the incoming supply is barely above freezing, but that doesn't make the tank bigger.
The thermostatic valve makes it so that the water that comes out of the water heater is at a more reasonable temperature.