There's massive population in the desert now, but that's not where the water is going. The vast majority of water is used by agriculture, which has also expanded massively in the same time frame. It's a red herring that natives and early settlers farmed in the same areas - the water they used is nothing compared to modern agriculture.

Efficient water usage (e.g. drip irrigation) and not growing comically unsuitable crops like alfalfa would solve this problem, even in the face of climate change.