Why can't people just opt to be buried without embalming or a casket? Sounds like a nice way to go buried whole and maybe with some sort of tree seed that grows over where you are laid. Not going to lie on a personal level, the composting process sounds terrible.
Human remains can be somewhat toxic (particularly to humans). Human remains are a breeding ground for disease that specializes in breaking down humans. Now imagine that diseased juice getting into the local water system.
They are not diseases, but common microorganism - and they are specialized into breaking down any dead organic material.
You don't want them in the drinking water, though. But you don't want any microorganism in the drinking water.