I agree with OP. Solve the big problems first. If at some point landscaping ranks as a top consumer of water, then solve it. Attention and effort is a resource -- spend it where it has the most impact. http://en.wikipedia.org/wiki/Amdahl%27s_law
There's pretty lucrative incentives for adjusting landscaping to reduce water consumption - I grew up in the Palm Springs area (which, ironically, is one of the few parts of California that can water itself - the golf courses have to buy their water from outside sources, but there is a large aquifer out there), and there's been a major move towards desert landscaping to take advantage of it.
No need to waste water in there, and comply with neighbor whatever regulations.