didn’t they give their seal of approval to a house that used three times as much fossil fuels as a regular house?
It is possible. BUT you have to understand how the LEED rating system works. It is NOT about energy-efficiency, though that can earn you points. It is NOT about water-efficiency (well, most LEED rating systems), though that can earn you points. They have a number of areas in which one can earn points, to wit:
SS Sustainable Sites or Site Selection
WE Water Efficiency
EA Energy & Atmosphere
MR Materials & Resources
IE or EQ Indoor Environmental Quality
ID Innovation & Design Process
R Regional Bonus
Some of these have base requirements that must be met, all have additional points to earn and all that is necessary is that you have enough points to claim the rating level (certified, silver, gold, platinum).