There is outrage because PETA is using financial hardship to coerce an ethical choice. Imagine for a minute if ISIS made the same deal in exchange for living under Sharia law for a month or if the FFRF paid a water bill in exchange for a public pledge disavowing God.

Adding insult to injury, PETA isn't offering to pay the water bill of everyone willing to agree to their terms - they'll do it for ten people they pick. In other words, you aren't surrendering your own code of ethics in exchange for money, you're surrendering your own code of ethics in exchange for being judged worthy or unworthy of PETA's money.

Finally, PETA has framed it as a sop to the indigent - the "struggling families" canard they start their pitch with leaves no doubt that this is the rich degrading the poor for fun and pageviews. It's a craven grab for attention, as everything PETA does tends to be - they're pretty much the liberal Westboro Baptist Church.

What they could have done is driven around Detroit with their "baskets of vegan food" and handed them out to anyone who could show them an overdue water bill until they ran out. They could have even dragged a camera crew around with them. They would have gotten a lot more press, and the majority of it would have been positive. There also would have been zero outrage about PETA enforcing their ethics on anyone - there's a world of difference between "going vegan" and "not looking a gift tofurky in the mouth."

But they didn't do that for the exact reason Mormons send their kids out on Mission - getting doors slammed in your face when you're "trying to do a good deed" is the most effective way to turn the young and impressionable inward and away from the temptations and trials of secular life. So PETA figures out a way to deliver charity in the best possible way to deliver maximum outrage so that they can point out to their members that the meat-murderers are so blind with rage they can't even see a gift for what it is.