When it comes to consumer goods, reduce-reuse-recycle makes lots of sense. Don't buy that bike if you're not going to use it. If you are going to use it, then reuse a used one. Once you're done using it, recycle it instead of dumping it into a canal (the Dutch option :)
That consumer-centric logic may make sense for private goods, but it may not make sense with water, a collective good for which "use" has a larger definition.
Consider the low flush "green" toilet. Most people consider the water "used" when it's flushed down the toilet. Under that belief, it makes sense to "reduce" water use by installing a low flush toilet, but such an installation may not make sense when the sewer system needs lots of water to "flush" through solids, if the treatment plant works better with a higher liquid:solid ratio and/or if the treated water can be reused or even recycled (yes, toilet to treatment to tap). Under those conditions, low flush toilets may deliver worse results for the consumer who has to pay for the new appliance (they last for decades) or for the utility that needs to spend more time or money (a cost that's passed to customers, of course) to adjust to lower water volumes.
Bottom Line: Don't just look at the isolated impacts of an action or policy -- consider them from start to finish.