Well...I know very little about data center water use, but I know a decent amount about water use in general. While the amount of water on the planet may not change much, the location and character of the water matters a great deal for its use. The state of California goes through large swings in the amount of water available. The fact that the Pacific ocean is next door doesn't make up for the amount of fresh water available for use in farming, drinking, sustaining environmental habitats, and a host of other uses, like cleaning, landscaping, cooling, dust control, etc. We use water for a lot of things, and the amount of it that arrives in this particular area, through snowfall and rainfall, on an annual basis matters a great deal for how people live their lives. Allowing new construction that is heavily dependent on water use, whether it is a nuclear power plant, more agriculture, or data centers, can have a significant impact on our communities because it reduces the amount of water--the kind of water we need--available to sustain the other things humans do in the state (including sustaining our natural environment, such as fisheries and bird migration).
So, if you build a data center in the Sacramento Valley, and it requires a large amount of water to operate, to make that work given the other water needs in the state, whatever water the data center uses needs to be either reusable (without significant processing), or replaceable (not easy in California). If you need to process the water to make it reusable, then you need to use more power (and other resources).
I'm sure there is a lot of fearmongering about data centers, water use, power use, etc., but the availability of water is a significant concern in many places. That's why humans pay attention to things like droughts, and have for centuries.
I know we need more data centers to keep up with the pace of technology, just like we need more power generation (I'm a fan of the the nukes), but there are trade offs that must be considered. One is, if data centers require a lot of water for cooling, which it seems they do, it probably makes sense to build them in areas that are less subject to droughts. And if there is a lot of agriculture there (often there is), it's understandable that people who rely on safe, fresh water to live and work, are concerned about the availability of that safe, fresh water supply.
