1.) I think the key word in the whole situation is 'system'. Once the break occurred and the pressure was lost, who knows how far back up the pipeline any contaminants could have spread? Sure, once pressure has been restored, it's unlikely that you'd have anything new coming in, but if there was an issue during the 'down' period, it could take a while before anyone found it. So they have to treat the whole system as possibly contaminated.
2.) I did a quick google search using the terms "boiling water for purification" and lots of relevant data came up. One site (
http://giardiaclub.com/water-purification.html) specifically addressed the boiling time, saying that the long times aren't neccessary, as long as you only count the time that the water is at a full, rolling boil. That, and that for higher elevations you need to add more time (1 extra minute for every 1,000 ft of elevation).