As long as you actually donate to the cause, I don't think it matters what you do. Go ahead and have a bit of fun whilst you're doing it. The challenge, despite the fact that it has become more of a "show off" now, has still raised a lot of awareness and most people I know have donated after.
Regarding the argument about wasting water, please take into consideration how much water you use on average during the day before you worry about a little bucket of water.