So there's already going to be a major shortage, so they discount to further aggravate the problem?

Now, it's not really a major thing to consider since water is so cheap already that almost no one is thinking about the cost when filling their cart with ~$1 gallons of water. They were going to sell out in basically the same amount of time regardless, and this way buys the store good will ("thank you Shaws!", for example).

And I agree with your moral rationalization of you hording as much as you can get (within reason), adding in the fact that if you realize it's more than you need, you can always share it with friends/neighbors.