I'm not sure what you mean by being the only tool in the toolbox. There's a long list of policy tools once you establish ownership. For example, if I want to turn your house into a public park, I can raise a tax to buy it instead of just taking it from you.
You argued that "seniority systems are the most fair" and I pointed out they often don't work that well. I'm not sure why you brought in eminent domain, but agree that it can be a more reasonable way to resolve the friction, rather than just screwing someone over.
In general water rights (even moreso than mineral, air, etc.) are notoriously hard to get "right", and nobody seems to have managed so well that it's the obvious approach to follow.
Do you have any examples a system that doesn't respect senior property rights and work better?
Most land in the united states has followed a possession seniority system since it was conquered and bought from native Americans. Decision makers don't periodically redistribute it without consideration for current ownership or compensation. The few cases where it does happen are widely considered grave miscarriages of justice.
I bring up eminent domain because it is a relevant policy tool in the toolbox that can be used given that a legal doctrine and history of water right ownership has already been established in the west.
Some people think we should just pass laws to dissolve established property ownership. Some people in this thread don't even get that far and think the state should just ignore law and history and simply seize it.
