Yes, wasting water is actually bad for the environment. There are anthropocentric, biocentric, and ecocentric reasons why wasting water is bad.
Anthropocentrically, fresh water is a vital resource for the survival of our population. Seeing as less than 1 percent of the world’s water is freshwater and available for us to consume (not trapped in glaciers), there are limitations that factor into our carrying capacity as a population on Earth, including the availability and distribution of freshwater. Different countries are endowed with different stocks of freshwater, and depending on their replenishment rate and usage rate, each has varying degrees of water scarcity that need to be addressed.
Wasting water in a country where it may appear water just magically comes out of the tap (e.g. Canada, the U.S., most developed countries), is wasting a precious, vital resource that millions (about 663 million) don’t even have clean, safe access to.
Furthermore, in places where clean water is scarce, overusing or wasting household water limits the availability of it for other communities to use for drinking, cleaning, cooking, or growing—and thus contributes to disease, illness, or agricultural scarcity and starvation.
You could tack on the economic incentive to save water, as it means lower household water utility bills, one of the largest incentives for waterwise individuals or households to conserve water.
Biocentrically, other species rely on freshwater besides humans as a vital component to their survival! Overuse of freshwater in household settings means there is less fresh water for agricultural use (which affects humans on a food scarcity level), but many livestock species rely on freshwater. Also, as we divert more freshwater from aquatic environments to supplement agriculturally, many plant and animal species are threatened or can become endangered. Despite our attempts to separate man from nature, we are indeed part of one ecosystem (the biosphere), and reliant on plants and animals; therefore, sharing and properly managing our most precious resource is crucial.
Ecocentrically, wasting water while our demand for water increases (as population and standards of living increase globally) means that we need to supplement for this lack of freshwater by pulling it out of aquifers or groundwater supplies in which the regeneration rate is lower than the extraction rate. This unsustainable practice decreases long-term water security and availability.
Furthermore, and almost most importantly, water takes a lot of energy, time, and money to filter and clean so that it’s drinkable. Wasting water or overusing household water means you’re wasting the energy-intensive process of filtration. The many steps of this process—extraction, transportation, filtration, etc.—require nonrenewable fossil fuels and as these resources become depleted, their dangerous by-products such as carbon dioxide build up in the Earth’s atmosphere, contributing to your carbon footprint and the Earth’s rising temperatures.
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