I have had a lot of experience with water injection.
Let's cover a few basics. First the pro side. Water injection tends to cool the cylinder intake air charge. In that respect it is a little like an intercooler. The cooler charge is denser and thus will provide more power. There is also more power from the water turning to steam. The cooler charge also allows for more ignition timing advance and can contribute to additional power. It also tends to keep carbon from forming in the combustion chambers.
Now the con side. Water injection can be hard to control. Too heavy and it can contribute to engine wear or even severe engine damage. It can contribute to corrosion to intake components. Anyone that has done much heavy engine work knows that an engine that has been run very long with a mildly blown head gasket knows that the cylinder wear on any wet cylinders can be tremendous. Cylinder wear is almost a thing of the past on today's engines. It is not uncommon to find nearly no wear or taper on and engine with well over 100,000 miles. Thirty or forty years ago such an engine often had 10 to 20 thousands of an inch of wear by that time. A cylinder that is injesting water can get that much wear in a few thousand miles.
If not properly controlled water injection may not do much good. The systems that provide water when engine vacuum is high and little or not water whan vacuum is low doesn't do much more than help keep carbon buildup down.
Systems that provide water injection during load may help to reduce ping and provide all of the benefits mentioned above, but it can be tricky to determine the correct flow. Such systems cannot depend on engne vacuum to draw in the water, but must have a small pump as well as a means to meter the flow according to demand.
Most of my involvement was with motorhomes and trucks that pulled RV trailers. Remember that 25 to 30 years ago, there was not as much control over ignition timing. Water injection was used to cut ping pulling heavy grades. It worked, but I most certainly had mixed feelings about using it.
It is also important to have some failsafe systems built in. I remember more than one vehicle that drained the water tank into the crankcase due to some sort of malfunction as well as the water tank being mounted too high.
I remember reading about a lengthly study a few years ago showing the smog benefits of water injection. They showed that carefully controlled water injection not only generated additional power, but could eliminate the need for an EGR system.
Water injection is sometimes used on jet engines. Such aircraft are sometimes called "water wagons". Agressive water injection provides a lot of additional thrust and can be used for supplimentry power for take off. The water doesn't last long though, and when it runs out, the drop in thrust is so dramatic that a pilot using it for the first time may think his engines stalled.
Water/alcohol injection was factory equipment on the early 60's Olds F-85 with the optional turbo engine. It was used to eliminate ping under boost. The engine had the same compression ratio as the non turbo engine. Although timing was retarded under boost, it wasn't enough. The system didn't allow boost unless there was fluid in the water injection tank.
No mater what, adding water injection adds considerable complexity to engine management.
