Islamic law -- particularly under Ja'fary jurisprudence -- prohibits Muslims from using impure water, including treated wastewater. Indeed, matters of purity and impurity are fundamental matters in Islam. In areas where pure natural water is relatively scarce, Islamic water-purity regulations are sure to have an economic impact, just like the rules that forbid Muslims from, say, consuming Haram meat and engaging in Haram sex.
Usually, it is not unexpected that the mainstream Islamic beliefs on the Minor Struggle (i.e., military Jihad) would come under the heavy scrutiny of concerned observers and those impacted by the Jihad. However, criticizing Islam's essential water-purity rules is an unnecessary interference in the lifestyle of the Muslims, for such matters are the domain of deeply learned, recognized and trusted Islamic scholars.
Yet, it must be noted that those who wish to express an impactful opinion on this important matter should properly research the subject matter first. The prohibition on the usage of treated wastewater is not absolute, for such water can be rendered pure by mixing it with larger bodies of natural pure water. Thus, water can purify water and the overwhelmingly positive can alter the properties of the relatively negligible negative.
People from various religious groups invest heavily on continuous basis to abide by their spiritual regulations. Some people eat cow meat unconditionally; others eat only Kosher or Halal cow meat; yet, some others don't eat cows at all and worship them instead. Such are the matters of religion and they always have economic impact of some sort.
Where there are water shortages among Muslims, the solution for them is not to use impure -- and therefore Haram -- water. Instead, they should invest in proper water solutions that meet both their spiritual and worldly needs: Wastewater treatment combined with the necessary purification with natural water.
To the Muslim mind, there are indeed valid worldly and spiritual reasons for requiering tahara (Arabic for purity), but explaining these is certainly irrelevant. Therefore, overbearing scrutiny of such innocuous Islamic practices risks becoming an open intolerance of Islam and the Muslims. And this contradicts the freedom of religion principles championed and guaranteed by secular Western societies.