If you get out of rent controlled areas like San Francisco, you'll find it's actually quite common for landlords to foot utility bills (except electricity), or at the least charge a flat fee per month that doesn't vary with usage.
Having individualized water meters isn't nearly as efficient or convenient for large apartment complexes as just doing it centrally, especially when the landlord is also using a large chunk of the water (eg for communal lawns). Rent control regimes prohibit separate fees (or higher rents) including the price of the water, so landlords in rent control situations will pass such costs directly to residents any way they can, even if it is inefficient. They'll also pass the costs of upgrading fixtures like toilets and showers, since they're not allowed to charge for them either.
I lived in Santa Cruz, CA for 14 years where there is no rent control, and in regular houses. While apartments may have utilities included for the reasons you gave, individual houses don't because there is no need.
In one house it would have cost $20 more to replace a toilet with an efficient one, versus repairing the existing leaking old one. I wanted to pay that $20 extra - they refused leaving me paying higher water for several years.
Having individualized water meters isn't nearly as efficient or convenient for large apartment complexes as just doing it centrally, especially when the landlord is also using a large chunk of the water (eg for communal lawns). Rent control regimes prohibit separate fees (or higher rents) including the price of the water, so landlords in rent control situations will pass such costs directly to residents any way they can, even if it is inefficient. They'll also pass the costs of upgrading fixtures like toilets and showers, since they're not allowed to charge for them either.