Perhaps there are some Detroit residents who, if they were just a little more organized, could get themselves into a better situation. But some of them are just in bad situations no matter what they do. And who knows, maybe some of them haven't paid their water bills because they have decided that food, shelter, and medicine are more important. But nah, best to leave them with no running water. Otherwise, how will they learn?
Edit: I suspect if the city of Detroit offered the deal you're suggesting, there would be lines for it around the block (though even these lines would contain only the people who had transportation to get to the line, had someone to watch their children while they worked, etc.).
Solar can be used for distributed generation, why can we not provide distributed water production?
In other cases, people are in situations where they're not earning enough to cover all of their life expenses, but the water department itself has turned them down for assistance. We see their attempts to do the best they can in their payment patterns. $25 here, $50 there as soon as they can.
These are not people that sit around actively looking for handouts. And many people we've helped have volunteered to help us however they can.
And objectively, giving people money works pretty well. https://web.archive.org/web/20101107195857/http://www.econom... https://web.archive.org/web/20141111020223/http://www.vox.co...
http://www.npr.org/blogs/money/2013/10/25/240590433/what-hap...
http://www.nytimes.com/2014/06/30/opinion/let-them-eat-cash....
http://www.foreignaffairs.com/articles/141214/christopher-bl...