It's not insane. Open markets work for every other type of commodity, and there is little reason to think it won't work for water usage as well.
Also data centers don't use water for cooling. They primarily use air cooling, and last time i checked air conditioning doesn't require a constant supply of water.
Also data centers don't use water for cooling. They primarily use air cooling, and last time i checked air conditioning doesn't require a constant supply of water.