I read that beer consumption was high because of unsafe drinking water. Was that an issue restricted to urban areas?
There's always room for discussion, but perhaps the sections Drinking Water and Beer from our FAQ will answer your inquiry.
One thing to keep in mind is that Cholera, one of the more severe pathogens spread through contaminated drinking water, isn't believed to have spread out of the Indian subcontinent until the 18th or 19th century, so medieval European peasants had that going for them. (Source: http://www.who.int/mediacentre/factsheets/fs107/en/).