Criticism 1: The ALS Ice Bucket Challenge is wasteful of water! In states with drought, it's contributing to that!
However, there's an issue of scale. Even if we assume that every Californian took the ALS Ice Bucket Challenge (highballing that number at 38 million people), and every Californian used 5 gallons of water to do so (in reality, most participants appear to have used 1-3 gallons), you get a grand total of 190 million gallons of water wasted. This sounds like a lot (it is), but again, this is an unrealistically high estimate, and you have to remember that the challenge is a one-time deal (nobody's dumping buckets of ice water on their head every day for this). I'd be surprised if 38 million people nationwide did this challenge (so far at least). But let's compare that number to other sources of water wastage.
For example, the average shower uses well over 10 gallons of water, and decreasing shower length from 10 to 5 minutes can save anywhere from 12.5 to 25 gallons of water (depending on the nature of the shower head). Replacing pre-1990's toilets with modern toilets can save up to 38 gallons a day per toilet. If we applied these numbers to even a fraction of all Californians, you quickly see that the amount of water wasted per day is greater for these activities than for my super-exaggerated ALS Ice Bucket Challenge example.
Hell, if you want something to rag on for the drought, look at golf courses! The average golf course uses over 300K gallons of water per day, and the 57 golf courses in Palm Springs use a million gallons of water each every day. In the state, there are 921 golf courses total. If we say that the average amount of water wasted in those 921 golf courses was 300K gallons, then golf courses alone in California waste over 276 million gallons every single day. And it's pretty hard to argue that the impact of those golf courses is more positive than the millions of dollars raised for ALS.
In reality, the bigger issue is (corporate) agriculture, but this is just a fancy thought exercise at the heart of it.
All in all, saying that the ALS Ice Bucket Challenge is wasteful of water and thus shouldn't be done is like saying "hey Girl Scouts selling doughnuts and other sugary confections at bake sales to fund anti-malaria vaccines is contributing to an increase in overweight/diabetic children" Is it technically right? Possibly/probably yes (if you stretch "right" a bit). Is it a nearly meaningless statement in the larger context of the situation? Also yes.
Criticism 2: The idea of donating to a charity as opposed to doing the challenge is just an afterthought, therefore it doesn't mean anything! People are just doing it to gain Facebook likes and be popular! Most people don't even know what ALS is!
This is a less common criticism, but still equally invalid. People have pointed that that originally, the "donate to a charity" idea was an afterthought for this challenge and it ended up being used by the ALS movement. People have also pointed out that this trend has become viral on Facebook and other forms of social media and that it's seen as hip and trendy to do so, and quite a few of the people who actually do the challenge don't donate! And of course there are the cynics who harp on about how most people doing the challenge on Facebook or Twitter or whatever don't know what ALS is and are just doing it for the popularity.
My response is "So what?" There will always be people who don't know or don't care about a cause. That's a fact-you can't get everyone to care, and you shouldn't necessarily spend all your efforts getting everyone to care. But here's more facts. Right now, directly because of the ALS Ice Bucket Challenge, over 11 million dollars has been raised for a really good cause, and a lot more people know what ALS is. These are things that would not have existed without the challenge in this timeframe. This is a fact, and no amount of "BUT THERE ARE PPL WHO DON'T KNOW AND AND IT'S JUST FOR FACEBOOK LIKES" will change that.
Is the fight against ALS over? No. Is there more research and funding needed? Yes. Were there ways to improve the challenge (for instance, to incorporate some water usage awareness)? Yes. But do any of these things make the overall challenge a failure? Not even close.