Water cooling is usually used for higher-end components that do generate more heat and are harder to be cooled with just air cooling solutions (end up being noisy). Another common use is for overclocking where you need the lower operating temperature in order to push higher voltage and get stable operation at higher frequency.

For most lower power hardware there are pretty good aid coolers that manage to provide silent operation even under heavy load, but they don't have to dissipate so much heat and they often don't provide the lowest operating temperatures as a goal as usually they are optimized for silent or near silent operation.