Fine acting, directing, music; stupid plot! (spoiler)

Why would they die of thirst? Wouldn't they just move on to the next well? By misinforming them, they keep them at this (possibly the only wet) well.

You missed the whole point of the deception. When the well stops dripping after filling only a few canteens, Bogart and his men think it has run dry. They definitely don't believe there is enough water there to supply the Germans, but Bogart sees an opportunity to fool the Huns when he intercepts the scouting party that has come to find out. If those scouts don't report back, the German regiment might head in another direction (Bogart's well is 50 miles out of their way). Bogart makes sure those scouts return with the story that his well does have water to make sure the Germans come there instead of looking for another water source that might actually support them. The allies think they are luring the Huns to a dry hole where they hope to hold them until help arrives or they all die in a heroic Alamo-style delaying action.

No doug, the reasoning behind it was very well explained. They lured the Germans to a dry well and hoped to delay them there as long as possible to give the British the opportunity to regroup. The Allies needed time...the Germans couldn't spare it.