The threat of denying somepony access to water sure sounded like it would result in obedience. Then again, following through on that threat against somepony powerful -- like, say, one of the 'Eighths' of a Star temple -- would probably result in an armed uprising. Better to give 'basic' water away for free, no matter who asks, but promote upstream, 'special' waters as reserved for the elite -- the better to get those elites to agree to whatever the Lunars required.