That's not the case at all in California. There's thousands upon thousands of lawns and most people water them all year. Many cities still have ordinances requiring lawns be maintained, you can't just let them die or go to weeds lest you be fined. It's expensive to convert them to drought tolerant landscaping so most people just keep grass lawns. HOAs are militant about lawn maintenance and often restrict how lawns can be redeveloped from grass.

It's only in the past decade or so new development has started requiring drought tolerant landscaping. Municipalities have also recently introduced ordinances to limit watering. But this is all a reaction to the serious droughts we've had rather than being proactive.

And yet total residential usage of water is only 10% California’s residential / agricultural / industrial water usage. Agriculture is 80%.

The grass bandaids on commercial lots is not captured by that 10% residential use figure. So all those dumb strips of grass on medians and in front of strip malls get counted in that 80% figure. A lot of that water is wasted by running off into drains.

Grass lawns are a waste of water, gas (mowing/maintenance), time, and effort. Reducing grass lawns in residential and commercial spaces would make for a meaningful reduction in the state's water usage with little reduction in economic output.

No, the 80% figure only includes agriculture. Not grass fields on commercial lots. Consider this: produce is mostly water. Now consider the weight of all the produce in California (including waste like corn stalks or potato plants) to the weight of all the grass lawns. 8:1 would be an extremely generous ratio in favor of the lawns.