Where are there humans going thirsty? Honest question.
So the consideration that "people are going thirsty" should have zero effect on how Californians deal with their problem. It serves nothing more than as an emotional device to make people feel bad.
I don't know enough about the water system and the patterns of shortages to understand the prevalence of direct competition between sets of users. Of course a weird thing is that municipalities may have locked in particular sources, so there may not be anyone in competition with us at all (for example, we in San Francisco have near-exclusive access to Hetch Hetchy, so water demand from farmers elsewhere in the state isn't likely to threaten our municipal water supply, at least not very directly).
I guess I need to learn more about the extent to which different users actually compete with one another. Clearly livestock farmers in the Central Valley are in competition with crop farmers there for the same water resources, but their competition with city dwellers for sources of what might have been human drinking water is a thornier question.
California could go the desalination route, but so far that progress is painfully slow and the methods being selected may result in significant harm to local marine ecosystems: http://www.reuters.com/article/2015/04/15/us-usa-desalinatio....
Something like this would be much better: http://waterfx.co/. Unfortunately, last update in their blog is a year ago...
That said, looking at it now (and especially once synthetic meats come online, out of cost efficiency if nothing else), I think our children might look back on the practice of animal slaughter as being pretty horrifically barbaric.