California has plenty of water for the humans. Whether we have enough for the current scale of industrial farming into the future is uncertain.
edit: I left unsaid that my understanding is that a lot of CA water is snowcap melt, and that there is some degree of uncertainty about how the changing climate will impact that.
In fact, an apartment dweller uses only as much water in a year as is required to grow $200 worth of almonds. http://www.motherjones.com/environment/2015/01/almonds-nuts-...
Acting like we can't build more housing because of the longstanding drought is a seriously NIMBY argument that is usually made in bad faith. Not that you're making it in bad faith, I'm just giving some context for the sake of being informative.
Soon, I'm sure, the capacity will increase and in 20 years all of the articles will be about how to move tech companies to a nicer, less urban city.
Every third sentence out of the YIMBY camp is about the effect of urban density in communities: how complete streets, walkable businesses, public space, etc. bring us both physically and socially closer together, walking back the hyperatomization of drive-alone commuting and automobile-scaled environments.
I think your second paragraph has great points about what makes a good/livable community, and is closer to what I think zoning should take into account.
That's essentially what's being litigated in this debate. YIMBYism argues that there is such an ethical principal: society ought to be inclusive, the playing field ought to be level, haves ought not to have too much power over have-nots, etc. We contend that they apply just as much to urban land use as to healthcare, immigration, and tax policy.
Modern zoning is a deployment of state power to help reinforce and grow the asset values of a small group who were in the right place at the right time, valuing their aesthetic enjoyment above others' ability to make a living. Maybe we don't have a positive obligation to create an unlimited amount of affordable housing, but we at least have the obligation not to use the power of the state this way.