because you cooled the combustion too much i.e heat = power and energy. The gains from water injection come from running advanced timing and boost. The cooler air increase is negligable wash because you are replacing fuel and air with water in a limited space. There is a point of diminishing returns with water injection cooling. I'm not trying to debate you but please backup your statements with some logic.
When I was in high school (in the 80's)My dad and I built a turbo charged 1600 volks wagon bug with electronic fuel injection. It only had 8 or 9 psi of boost. But on water injection I could run up to 13psi or 14 psi. The car was a rocket . I used a modified kit from Spearco and a high pressure pump. It had to be metered right . Too much and it lost power. It took some fine tuning but we got it right. The weakest link in a VW is detonation can destroy it easier being air cooled. Just FYI