U.C. Davis paper studied (okay, the paper didn't actually study) water quality in National Forest grazing allotments and found it to be mostly okie-dokie WRT water quality. I dunno, having just skimmed it, but decide for yourself.

Water Quality Conditions Associated with Cattle Grazing and Recreation on National Forest Lands
Quote:
Nutrient concentrations observed throughout the grazing-recreation season were at least one order of magnitude below levels of ecological concern, and were similar to U.S. Environmental Protection Agency (USEPA) estimates for background water quality conditions in the region. The relative percentage of FIB regulatory benchmark exceedances widely varied under individual regional and national water quality standards. Relative to USEPA’s national E. coli FIB benchmarks–the most contemporary and relevant standards for this study–over 90% of the 743 samples collected were below recommended criteria values. FIB concentrations were significantly greater when stream flow was low or stagnant, water was turbid, and when cattle were actively observed at sampling. Recreation sites had the lowest mean FIB, total nitrogen, and soluble-reactive phosphorus concentrations, and there were no significant differences in FIB and nutrient concentrations between key grazing areas and non-concentrated use areas. Our results suggest cattle grazing, recreation, and provisioning of clean water can be compatible goals across these national forest lands.


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--Rick