The problem isn't storage capacity. It's wasteful consumption growing water-intensive crops in the desert.

California has already invested a lot into reservoirs. In fact, as a pilot, I recall noticing that nearly all lakes in California are actually man-made reservoirs. I doubt there is much room left for economically building more; all the easy ones have been taken, and more. Surely the cost benefit of just investing a lot into desalination must be getting close.