It's to stop people from building giant reservoirs on their property, which can actually affect the local watershed. There was a case in Oregon about a decade ago where a man built three huge reservoirs on his property.

It's the difference between water rights in the dry West vs other parts of the country.

No one in wet Pennsylvania State would care, for example.

There is an entire set of legal doctrines and a body of law governing water and how it is allocated, etc.

I believe most of it stems from water diversion laws which were created during the gold rush. Miners started using hydraulic processes for getting gold which required large amounts of water. At the time, it was basically available on a first come first serve basis. That means if someone upstream from you opened a gold mine and diverted the water into their land instead of yours you had no recourse.

In some places, water collection bans were an anti-mosquito initiative.