If a waitperson were asking this in the U.S., wouldn't it be more usual to hear: Do you want water to drink, Sir?
I used this as my answer too, at least we know we're right even if duo lingo doesn't ;)
Señor is stated at the beginning of the sentence. For the sake of your sanity I'd recommend sticking as closely as possible to the original sentence when translating.
I think it would be better for my sanity if I didn't have to write rubbish English translations so often! :-)
I put "Sir do you wish to drink to drink water?" It was marked wrong, but I believe it would be a much more likely way to be asked in English than "want"
Remember that these sentences don't reflect real life, but they are here for practicing purposes. Querer/"to want" is a more ubiquitous word. "To wish" is better translated with desear.
Another alternative translation "Sir, do you want to drink some water?"
It's "beber agua" here, "drink water", meaning that water is the immediate object of "drink".
"Do you want water to drink?" would be "¿Quiere agua para beber?"
So for the purposes of developing accurate translation we are required sometimes without warning to translate Spanish into an English sentence that no one English would use because it sounds stilted and awkward. However in Spanish it is natural to use both sentences frequently so we must be able to differentiate between the two....is that the situation here?
I am not sure how "Do you want water to drink?" is a more likely sentence than "Do you want to drink water?"
In any case, remember that these sentences are primarily here for practicing the language. They are not intended for being used without just like that, but rather to give you the tools to make sense of the language. A straightforward translation would be the simplest here.