They are a bunch of fucking hypocrites who rather than work hard to compete with Snowbowl, would rather sit on their fat asses and use judicial activism to thwart the efforts of Snowbowl.
I don't know anything aboutt the issue other than what is stated in the article. But, it seems a lot of comments about the Indian tribes interference in the matter mirror your thoughts.
Also, it's my understanding that the water is treated but not to the extent drinking water is treated. If they don't have any problems with this in AZ I see no reason this can't be done at other hills that require snowmaking.
Although, next time I scorpion after catching an edge I'll make an effort to keep my mouth shut and not swallow any snow.