Earlier quoted context omitted.
The problem with that is that it's not water that's so valuable, it's water in California. Penalizing water use everywhere, even in rain-soaked places, would be counterproductive.
That's a good point. But I wouldn't classify the water usage label as "penalizing". It's more, um, informational. So if you're in CA, you might set an ideal "virtual water budget" for yourself (100 kl/mo for example), but if you're in VA, your ideal could be several times that.
It does not matter where you are eating Californian almonds; those almonds still used Californian water.