It hasn't gotten THAT silly... yet. Thank God.
Ahhh... You have not encountered the "derived from" rule or some of the other environmental regs... Under the derived from rule you can still be required to treat water that meets drinking water standards as hazardous waste based on it's source and method of aquiring the contaminant in it.
I heard Paul Harvey talking one time, about a town in Alaska that had to build a wastewater treatment plant... even though the water source was cleaner than environmental regs.
Indeed, we cannot live without the finite wisdom of Big Daddy Government. Hey, no running with that pointy stick! If you run with pointy sticks, you'll put your eye out, and the terrorists will win.