While I agree that something like the water heater permit is ridiculous and definitely a money-grab from our local government, most Nanny Laws don't exist because of government greed -- they exist because of dumb people -- you are just the unfortunate, responsible and intelligent person who gets dragged along for the ride.
Here's the gist: Nanny Laws are meant for the guy whose IQ is 40 points lower than you, who never graduated from high school, whose mother had a few too many margaritas in the first trimester of pregnancy with him and who sniffed waaaaay too much glue in junior high.
He'd happily hook up the water heater himself when he knows nothing about it, because it seemed like a good idea at the time. He doesn't neuter his animals because he's too lazy, and if he builds a barbecue which is next to the neighbor's fence and eventually catches their roof on fire, he'll just declare bankruptcy and move on before the neighbors can sue, since he's already three months behind the mortgage payment anyway and has a few bench warrants out for his arrest to boot.
In other words, there is someone out there who needs these laws to hold them in line and remind them to do the common sense thing. There is someone out there who would endanger you, themselves, and society at large if not reigned in by a, yes, obtrusive and meddling government. Sad but true.
Just remember...it's not for you. You don't need nannying, so you obviously resent the over-control. But it's for them. And they DO need it. By nannying them, Uncle Sam keeps you safer from rabid dogs, barbecue fires which spread to other structures than their owners', and cars that fall apart at 60 mph on the freeway and kill families in other cars.
Don't hate the Nanny Laws or the Nanny State. Hate that we have somehow managed to birth into our world a bunch of people who need such obtrusive laws in order to do the right thing.