Implementation problems - The process and procedure is not as straightforward as 'dig a hole, put some gravel and you are done'. In fact, if you don't follow the correct protocol, you will screw up the ground water table.
Lack of standards - I am yet to come across a protocol and standard for implementing RWH. Every RWH expert has their own protocol. In fact, someone as famous as Aamir Khan touted a revolutionary process of RWH, which proved to be disastrous for the water table.
The consumer need or want - This is the most impactful reason in my opinion. The water crisis is not in your face, it is not an impending problem. Also, having your own source of water or implementing RWH is not something you can flaunt and show off. Perhaps why people spend so much on the apartment/house and so little on RWH. Had there been a consumer need, private enterprises would have swung to action. We probably would have a Swiggy'ish startup solving RWH here.
Corruption, let's not forget the politician driven agendas for not enabling self sufficiency in water supply. If the water problem goes away, that tool is no longer available for elections. Yes, water crisis is a political tool and is a pretty big one. The farming community almost always is driven by this tool to decide whom they vote.
So, yeah while in theory everyone should implement RWH and the water crisis will be solved, this theory does not hold any water in practice. We need a herculean effort driven either by the govt or a non-profit to bring about the awareness in people. Once the consumer need is established, private enterprises will take care of the rest.