The co-governance aspect was clearly a huge sticking point, and I agree Three Waters would have passed under the previous government without it. But this government has been very vocal about staying out of local government (except when they don't like something a council did...) so a reformulated Three Waters seems very unlikely to pass in the current climate even without a co-governance aspect.

There were also councils quite against Three Waters in general, which as far as I saw were the ones doing a good job on their own. Kind of like how only people in flood zones want flood insurance, I guess.