Water heater straps too short. Replace straps? Get extension?

If you haven't got access to replace the strap, I'd just replace the bolt with a piece of threaded rod and a couple of washers/nuts.

They won't lie flat to the brackets, but since this is just for stability, they don't need to go tight so this shouldn't matter.

The above is obviously assuming that you can run a straight line between the holes on the two brackets, but it does look like this is possible from the picture.

Your best bet is to just go purchase a water heater strap that has the length needed. If however the issue here is that it is next to impossible to gain access around behind the water heater to remove the old strap and anchor in the new one then you probably need an alternative.

An alternative that makes the most sense to me is to acquire a piece of thick sheet strap metal that is equivalent to the existing strap. Then splice this onto one side of the existing strap that is too short. The splice can be done easily with a number of pop-rivets.

If I were to be splicing like this I would clamp the new extension piece to the end of the existing strap with an overlap of about 3 inches. A convenient way to clamp would be to use two pairs of vice grip pliers to clamp on the upper and lower edge of the strap overlap. I would then drill the appropriate holes for four or six pop rivets. Make sure to not use the smallest diameter of these rivets as they are aluminum and too small could sheer off under the strap tension. I would then install the pop rivets from the water heater side of the strap. This will put the flat head against the water heater and the expanded nubbin will be on the strap side away from the water heater.

If you are unfamiliar with pop-rivets (also known more generically as blind rivets) then check out the "Blind Rivets" section of this Wikipedia page.