If you shared an aquifer with a neighbor, wouldn't you want a law that your neighbor couldn't pee in his well? Personal liberties only go so far with shared vital resources.
Let's take a more relevant example. Excess fertilizer use in agriculture can lead to nutrient runoff, causing eutrophication in downstream reservoirs and estuaries. This could impact a large number of people. If the government provides incentives for agriculture to reduce its fertilizer use (by training in proper fertilzer application, alternatives to synthetic fertilizer, crop subsidies for nitrogen-fixers like soybeans), and this benefits the nutrient flux at the downstream sites, then was this an example of "nanny government", or a good plan?