Where does the article suggest the water is wasted? It seems to focus on the savings in terms of reduced demand on the municipal water plant- rainwater doesn't need to be treated- and in terms of changed behavior:

once they got that rainwater harvesting system, the way they’re irrigating is completely different, and they’re paying a lot more attention to how they irrigate. It really changes behavior. Definitely people are more careful with how they use that rainwater than how they were using the potable water to irrigate beforehand.