The odds of the water pump failing are pretty slim, but when it does it's a mess. Personally, I would probably do it since it probably only adds ~150 to the cost and I can see myself keeping a car to 150,000~200,000 miles. But, if you're selling fairly soon you'll never see that money again. I wouldn't fault someone for not doing it, but it's not the dealer prying money from you... it is fairly standard practice and not just on these Toyotas, on most makes.