Historically water that was bad to drink was only discovered because it looked bad (orange or brown color, muddy water, visible bugs or growth in the water) or it smelled bad, or it tasted bad.

Inevitably some diseases were prevented because of water sterilization, however, the intent was not to sterilize the water so much as to remove the foul taste and odor. Some doctors did notice a correlation between alcohol use and fewer diseases but because they did not know the cause other doctors could refute their findings by pointing to places where people who drank water were just fine.

The first solid case we have of a link between water that appeared fine being shut off to prevent disease is in the famous Broad Street Pump Outbreak of 1854. It would be until 1864 with Louis Pasteur's work that sterilization would become known to help prevent disease.

In the early 19th century temperance movements sprang up. These groups opposed alcohol not for its health benefits but to prevent drunkenness. Although anybody who has ever had a bit too much to drink will attest that not being drunk has some definite health benefits. Did I really ask that guy to punch me? Would death be better than this hangover?

The first linking of alcohol to what would later become known as fetal alcohol syndrome was in 1899. Other reports had similar findings but it was not until 1973 that a firm link would be established and Fetal Alcohol Syndrome was named.

To answer your question directly. Until 1973 the decision to drink alcohol for women and children would be based on moral principles rather than medical reasons although some doctors had suspicions. Before Louis Pasteur the decision to drink water or beer would in most cases quite literally be one of taste.