Ammonia is certainly a valid concern as it is very toxic to marine life. I've read studies from the early CALFED days that correlated ammonia to species declines, including Delta Smelt. Those studies had Federal funding.
Ammonia is also widely used as a fertilizer on farmlands that drain to Delta waters. The nitrites formed from oxidation of ammonia also effect biology in the Delta.
The point is that everyone involved with the Delta should do their part to stem decline of this ecosystem. Ammonia is a significant part of the problem regardless of which money groups can profit from its removal.
Water exporters plan on sucking more water from the system by installing an "alternative conveyance" (another canal) at Freeport, which is actually part of the south Sacramento metro area. They are looking at undesirable ammonia levels at that location which originate from the Sacramento water treatment plant not that far upstream. The water users don't want to go to the added expense of removing that ammonia if they can get Sacramento to do it for them.
Keep is mind that tertiary water treatment is frightfully expensive. Sacramento doesn't do it. Woodland and Davis don't do it. In all fairness nearly all of the Davis waste water discharge never reaches the river: it gets recycled as farm irrigation or wetland water in the Yolo Bypass. A study showed that tertiary treatment for the Davis water treatment plant would require a $200 per month increase in sewage rates. UC Davis has its own water treatment plant and they use tertiary treatment because their waste water reaches the Delta from South Putah. However, UCD doesn't need a very large treatment system and the university has deep pockets.
Water export reductions and changes in Delta hydrology need to happen before things will get better. Altered water flows through Delta mean that water moves so fast across the central Delta and toward the south Delta pumps that microscopic organisms forming the base of the food chain don't get time to complete their life cycle. Another component of the system crash.
A lot habitat restoration must be done before the Delta starts to come back.
It is dead wrong to blame Sacramento waste water for all of the Delta's ills, but ammonia is a problem nonetheless.