Retail prices include treatment, long distance transport, and last mile piping, not just the water rights.
And you show your ignorance of water law, first to draw/settle has the highest rights. Urbanized centers without local sources of water actually have to go out and buy up existing rights. In the end Agriculture isn't able to pay the same price so urban can always displace Ag water use, but until it is actually purchased the 80% have the legal right to continue to draw a share of water at cost.
Lawns in places where there isn't enough water to support them is a silly notion in the first place. Kids and people nowadays are hardly outside anyways xeroscaping for the Win!. (Yet you do probably eat milk, hence are a downstream consumer of alfalfa) And the right varieties of grass won't die in low water situations, they just go dormant, and will perk back up when favourable conditions return.
Waaaa Waaaaa Waaaaa, I can't find a job on my own so mommy and daddy shoud by one for me! FTFY