if you have some reservoir that you can top up, that's a great buffer. Pumping drinking water into the sea because your reservoir is full is not a thing as far as I know. So that implies they either don't produce enough; or they vary production as needed.

A realistic/feasible deployment would perhaps pair desalination with solar or wind (more likely on the coast). During electricity peak hours, it might be more lucrative to sell electricity to the grid and then the rest of the time top up the reservoir. I guess depending on how scarce water is, the $ per kwh earned via water might actually be larger than selling to the grid. But you get my point.

You are right that these things being funded via tax payer money, makes this kind of lateral thinking less likely. But if someone were to do this commercially, this would be a great way to make it more cost effective.