Based on my own experience, my charbroil electric water smoker has
serious trouble getting up to 250 with water in the pan. My theory is
that the evaporation of water from the pan is like a heat sink... that
is to say that significant heat energy is lost to the process of
turning water to steam. In fact, the temperature at the food level
seems to hover around 210-220 maximum when I use water. Since water
boils at 212, it kind of makes sense, or at least it sounds plausible
anyways. But with the pan full of lava rock or whatever, then my
smoker maxes out at about 250-260. And since using water requires
refilling, there is extra heat loss when you open the lid... and you
also have to deal with at least some greasy water when you're
finished... AND, water collects on the inside of the smoker and runs
down the sides and makes a mess... so in my book, lava rock (or sand or
whatever) wins over water in a heartbeat. I've never found any benefit
to using water at all.