I have seen these "hybrid systems" before, the heating element is only about 400 watts and I would not to wait an hour for hot water. You need a 1500 watt heating element to be effective. Plus, I like the easier access to the drain plug.
I'm going to install a Honeywell AM Series Thermostatic Mixing Valve for $110.
Atwood sales this part on the new XT model but they call it "Exothermal Water Heater" for $650.
This valve is plumbed in on the back of waterheater. By turning up the thermostat, the mixing valve adds in cold water to a set point which gives you upto 50% more hot water with no added recovery time.