A water cooled turbo can work but you need to have a mix not straight water of course... unfortunely, due to the high temps that turbos get, you can only run oil to cool the charger down, plus it maintains all parts to be lubed. Messing around with the cooling properties won't get ya that far, only into more problems. Current today's systems are so streamlined, its better much done for any more improvement. Just besides newer and space age materials.
If a water cooled unit was easy to do, it would be already br invented by now. Turbos been perfected about the early 60's for automotive use, and haven't changed at all in design. Just about the late 70's, intercoolers were just started to get recongized as a helper for the turbo system.
If your objective is to run about 7 to 10psi, intercooler is not needed. But again it does help to lower the compression temp though, meaning gain extra couple of more ponies. Thing to take in consideration is, what platform you planning to put it on.
4-banger, or V6, then you can decide on other add-ons for the system.