You mean, other than the fact that it absolutely is produced that way in existing fueling stations, and much of the drive for hydrogen as part of a clean energy solution relies on the use of electrolysis (or, possibly, splitting water with nuclear reactor heat) as the generation mechanism.
> The process is horribly inefficient but more importantly the cheapest way to produce hydrogen is through steam reformation of coal (or organic material to a way lesser extent).
Its certainly a cheaper way to produce it, but its not necessarily cheaper as an overall process, because then you do need an expensive distribution infrastructure. More, the necessary distribution infrastructure, even if end-to-end efficiency including distribution costs is better, has a much higher startup cost than distributed electrolysis.
Also, distributed electrolysis buys you directly in to any improvements in efficiency, greenhouse gas reduction, etc., for large scale energy production, whereas relying on steam reformation of coal, natural gas, etc., leaves you not only maintaining more dedicated distribution infrastructure, but with a separate carbon-intensive generation infrastructure that needs its own improvements.
And what infrastructure do you need? A gas truck with a pressurized tank on it. The cost of hydrocarbon based h2 will displace electrolysis in large scale production.
And your last point about distributed load efficiency gains, electric cars are already able to balance load and feed into a grid. It's always going to come down to cost, I'm going to buy the cheapest h2 around and it's going to come from steam reformed coal.
I really have to wonder if this is just a show put on by Toyota. The viability of H2 production is dubious at best, and at worst if you consider our drive towards a low carbon economy.