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Good_Burning_Plastic comments on California Drought thread - Less Wrong
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But that would still lower the amount of water used on grass lawns thereby increasing the amount of water available for other purposes (assuming the demand elasticity of grass lawns is larger than that of those other purposes, of course).
Status signaling through spending money on luxury items can be complex. The fact that not everyone can afford lawns makes the lawn a better signal for status and makes it more valuable as a status signal.
Yes, but that still decreases the amount of water used on lawns.
If having a lawn that needs water becomes a status symbol, rich people wanting to signal status can choose to grow lawns that take even more water.
Yes, in principle such a thing is possible. But we're talking about water.