That's kind of how property rights work. So if you're not going to go full "property is theft", then you need to show why water rights are different from the right to, say, the land (or the minerals on the land, or the timber on the land, or...)
And if you are going to go "property is theft", well, you're going to have to justify that with more than just the slogan itself, because it's a huge change, and the bigger the change the more justification you need for it. And you're going to have a hard sell, because people like owning stuff.
Well you got me, I'm one of those "property is theft" / "ACAB" nutjobs.
But also, federal/state/municipal authorities do eminent seizure on private property all the time, when it is necessary for a larger public need. Forcing title holders to sell back their "water rights" and then putting them on level footing isn't that much different, is it?
And if you are going to go "property is theft", well, you're going to have to justify that with more than just the slogan itself, because it's a huge change, and the bigger the change the more justification you need for it. And you're going to have a hard sell, because people like owning stuff.