Yeah we should probably stop subsidizing the heaviest water users. Instead we get high profile efforts that get a lot of attention and only save a token amount of water.
I believe the issue is that those water users own the water by right under the legal theory that the first users own it forever. The state could eminent domain it away but then they would have to pay some (probably very high) price for it, and nobody wants to do that. Eventually they are going to have to cough up the money.