Q: Is it against liturgical law for a priest to bless holy water but have a lay person do the sprinkling of the people for him? This would be in the case of a priest who has leg/knee problems with steps.
A: Personally, I see no problem with it, but I cannot defend it from the liturgical books. The rubrics at Mass presume that the priest sprinkles the people.
Even when the sick receive communion at home or in a hospital, a priest sprinkles them with holy water, but not a layperson.
When I was a kid, whenever we visited my grandmother in Minnesota, she would sprinkle holy water over our beds before we went to sleep. No way was anyone going to tell her she could not sprinkle water!
Another alternative is for the priest to remain in the sanctuary and sprinkle from there. Not everyone will feel a drop of water. But the action resembles the way we incense the people. The minister stays in the sanctuary. Not everyone is physically surrounded by smoke, but the symbol still works.