I agree with your last comment. It's not possible that all water agencies are staffed with idiots, and it is likely that their decisions are highly influenced by money factors. Clearly there is a collective belief in inspections among CA agencies. I don't know why all the other states in the country don't care. This could be an area for more research.

This line did make me laugh, "In most cases it's not clear what these estimates and projections are based on, and whether they are limited to facilities costs or include secondary or environmental costs.

It seems likely that these studies and estimates are coming from phD's at research universities. phD's have a reputation for being smart, but then again most of my professors in grad school were phD's and not all of them were smart.

I wish I had more time to thoroughly research this topic and interview people.