I would think lake water would be fine for an Island home where it has limited use anyway and drinking water is available everywhere. I would imagine the cost of a well wouldn't be worth the extra money. Even though I have a well at my place and the water looks perfectly fine we still buy drinking water. The idea of it sitting stagnant in between usage just doesn't sit well with me. It's like leaving a glass of water on the kitchen counter for a month and then drinking it. If I lived there and used it every day then I wouldn't have a problem drinking it.
I would think a septic system would be more economical over a pump out tank over the long haul though.
I'm not an Island person, JMO.
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