The aforementioned industries have pushed heavily for "water rights" under the guise of residential accessibility, artificially deflating their cost and forcing the population to subsidize their usage.

That's like asking why does the government take federal tax dollars to subsidize corn fields in Nebraska despite massive surpluses? Because those businesses then use those profits to continue to lobby for those under the guise of "jobs" and commercial welfare.

If you charged for water and also let farmers sell excess there would be incentive to improve efficiency. But politically this is untenable.

I think a consumer standard (like farmed with x quantity of water) might work just as well, and it might be a way to get around the normal politics.