Would it cost more to bury that dedicated fiber with the pipes? Would it be a huge cost to build out your own wireless network, like many power companies do?
There are still many water utilities serving area with a million or more customers that do not have ANY infrastructure connected to the internet. Back office and billing, sure. Infrastructure, is not connected. How ever do they manage? They manage just fine.
Let me restate for the hard of hearing and the hard of feeling, no critical infrastructure such as power or water should ever be connected to the internet. None. Never.
Power companies have two networks. The smart meter network is often a proprietary network - owned by the meter maker or a company specializing in it. They are not compatible with each other - so once your company goes with iTron or Landis&Gyr they're stuck with it. Upgrading the network becomes very hard (and they're not impenetrable either - L&G UtiliNet equipment is trivially easy to acquire secondhand and it is possible to attach it to a live network.
Similarly other network equipment can be obtained readily on the secondhand market - meters, modems, collectors and other gear. This is great because the gear is often proprietary and once you've invested heavily one system, it's basically impossible to migrate.
My previous company I worked for also had their own proprietary wireless network system. It was optimized for rural situations and the main reason you went with them was they could read more basic meter signals like water and gas (these meters just broadcast their readings out loud, while most electric meters are a 2-way network). So an electric co-op could also provide meter reading services for the water and gas companies to save someone having to drive hundreds of miles collecting meter readings.
These co-ops often don't have IT departments and a large number of them preferred out cloud service which handled the data collection and servers. Granted, the data was collected by a collector then sent via the power company internal network to our cloud servers via a VPN which was then used to access the collected data.
Now, power companies do have small advantages because of the necessity of cable infrastructure - they can run their own fiber networks alongside the power cable which provides the data uplink for these tings. (In rural areas, these also provide internet service via fiber - the power company already has a fiber netork running down the power lines to talk to their SCADA, it's not difficult to use some of it for internet access using VLANs).
Water, sewer and gas don't have that luxury - they can run fiber along with the pipes, but that cable is likely going to get damaged when the pipe needs maintenance so it won't last long.
And yes, a lot of the meters can be decoded with an SDR these days - they usually operate on the ISM 900 band. You probably can even hear your electric meter talking but likely cannot decode it since their networks are generally more complex protocols. (I believe Itron is a form of 802.11g ODFM at 900MHz). But like I said, the equipment can be had cheaply secondhand online. It's why there's a lot of research into smart meter security.
Now, to be sure, generally speaking there is encryption so while you can capture the data it's almost always encrypted. But there will be plenty of of unencrypted overhead data because these networks are often mesh networks so the meter reading is encrypted, but not the meter ID or network ID as well as other things like mesh network control so you don't end up with a meter reading going around in circles.