My question is in the header. It would seem to be a major environmental benefit if toilets used saltwater in stead of drinkable fresh water, right?
This question has tenuous links to Earth Sciences, but the answer is simply that, historically, freshwater has been used to flush toilets, and hence the sewage treatment plants have been developed to treat non-saline sewage. The water can be (and frequently is) recycled for domestic use, whilst sewage sludge can be used to enrich farmland. No such benefits accrue to flushing effluent with saline water. It is then pollution, whether it is disposed of on land or at sea.
In many estuaries and deltas around the world sewage sludge does end up in the sea where it accumulates as tidal mud flats with an unnaturally high lipid content. Give this sediment a few tens of millions of years of compression and maturation and it will doubtless yield oil shale.