My understanding is that "The best reasoning they give" is the entire point. It such a huge issue that it drowns out all of the valid but smaller issues you are pointing out. And, the benefit to the water is just a bonus.
Exactly, that is hundreds of miles over which no NIMBY holds sway. The state can do what they want.
High level, I agree with your comment. In the case of this experiment, it was built by the Turlock Irrigation District, which was "financed by issuing public general obligation bonds. The debt was systematically paid back over decades through local property taxes and water delivery fees collected from the farmers." However, there are lots of canals that are directly owned by the state, so they are good candidates also.