With regards to food and water safety (really, this applies to all safety regulations), you would rather get false positives than false negatives. It's better to be overly cautious than to be under-cautious. Because if we're under-cautious, then someone might get sick. So we actually want to pick a common, hardy bacteria that's easy to grow. There's several other reasons why E. coli is such a good indicator bacteria, such as:

• it grows quickly, so we can get test results quickly

• it's remarkably easy to distinguish E. coli from other bacteria, so much so that you don't really even need a microscope. The less technical expertise is required for water testing, the better.

• they're usually safe, which lowers the amount of training required for water testers, and also lowers the risk of disease in case a test gets mishandled

• they're generally more resistant to water treatment than other bacteria, typically being the last to die. So if we killed E. coli, that's a good indicator that we've also killed the other bacteria

I think false positives are preferable in that context. I'd rather have a lot of false positives than any false negatives at all when it comes to poop water