Ya, i just thought of instantaneous because in Bioshock it was...
Yeah. It works in Bioshock because enemies are just fodder, you don't actually get anything for killing them. You get rewards for killing enemies in Elder Scrolls, and being able to simply grind through everything by standing in water (which I'm assuming will be all over the place) will make combat a little too unfair for the enemies
I'd definitely go for an AoE effect though (within a certain radius of course, some bodies of water are quite large) and possibly some damage magnification. The environment would be a good factor for changing up combat. I'm also a fan of the other post that suggested freezing enemies in place if they are standing in water. It sounds like the frost trap variant spell we'll see in Skyrim. Skyrim will also feature flammable surfaces that will burn for a period of time if you light them on fire. Give damage bonuses for standing in that fire, even.