You just described Albuquerque (where I lived for the better part of my life growing up and in my early 20s), but you described it as a doomsday scenario, which I think is a bit of overkill.
Obviously, I have a lawn now, so grass grows here. Also, my entire neighborhood and our town buildings all have lawns, so that means that grass grows here also. None of my neighbors have replaced their grass every year (in fact, most of them are still rocking the same grass that was installed when the house was built in the late 90s).
My house is at approximately 7,000ft elevation, and we have watering restrictions (and according to my neighbors, we have had them for the better part of 10 years now), where we can only water 3 times a week, period, and grass still grows.
I'm gonna guess that you either have had poor luck with grass in the past, or you live on the east side of Denver, because I have seen some gorgeous lawns in Southern and Western Denver also. If it helps, I live fairly close to the mountains, and down here, we have a lot of green grass everywhere (its actually not far off from the looks of North Carolina, believe it or not, with a few 15,000ft peaks nearby).
No snarkiness intended with this post, but what you have described seems to be about the exact opposite of what I've observed. If I could grow grass in Albuquerque (think higher elevation than Denver, with temperatures about 20 degrees hotter on average and much less natural growth, and a hard layer of "caliche" about 1" down in everyone's yards that practically requires a jackhammer to break), than I would guess its possible here too
