The main advantage of a water cooled bearing is you can use the a portion of the water from the pump discharge to lube the bearings. That way you can always be assured of the lubricating fluid supply and do not have to relay on another pump. Some pumps do use another source, especially if the water being pumped is dirty, but it is still cheap and non-contaminating if some leaks into the pumped fluid. However, water is not always a good lube especially on pumps with high speeds and/or mechanical loads. Water is not very viscous and becomes less so with increased temperature. Even small 3600 rpm pumps will use oil for lubrication. Some large, high pressure pumps will have their own oil pumping and cooling system for the bearings.
