This affects the amount of damage that the rogue deals in one round of the encounter. In all but the most unusual circumstances, that should not trivialize what would otherwise be a challenging encounter. Does your claim that this is broken and disruptive rest on anything other than an aesthetic judgement?
Anything that effectively negates a broad set of challenges is certainly a potential target, particularly if it is a unique way of doing so. For instance, I agree that if you think that adequate water supply should constitute a challenge, create water is problematic.
I'm less sure about Observant since that is not the only way for a rogue to get a passive perception that is higher than a majority of trap finding DCs. With expertise and WIS 14, passive perception will be 16, 18, and 20 at levels 1, 5, and 9 respectively. In other words, I think you have the situation that you view as problematic with or without Observant.
Also, I think one can view the issue the other way around: in a world in which some creatures are Observant, many traps would probably be hidden in such a way that merely wandering by with a high passive perception is not sufficient to notice them (regardless of the abilities of any particular group of PCs).
Also, how to use passive perception is up to the DM. It is legitimate to require PCs to be dedicating their attention to watching out (at the expense of not doing something else like mapping) or even to have to choose between, say, attending to the next 5 feet of walls, floor, and ceiling vs. listening and peering ahead to detect unwelcome company.