I also agree with you that it's a great idea, but I think it does depend a lot on location. When I lived in Devils Lake and went to school at the college, there was no way I was drinking the tap water because the water in my own apartment made my clothes rust-colored and the water was nasty, so I'd buy gallon jugs of spring water at the grocery store and bring a water bottle with me to school.
Since living in Fargo, I've been drinking tap water, which I find much more appealing and I think NDSU could have a similar ban on tap water if they would provide more areas with water fountains or spigots to fill refillable water bottles. However, there would have to be exceptions to the rule. For instance, in cases of flooding and extra sulfur is added to the water, then there could be exceptions to sell bottled water.