Water helps speed up the digestion process. It's not that the food is going through so fast that it's not absorbed properly. It is simply helping the body perform that task at a faster and more efficient rate.
Yes, I'm adding 46oz of water to the dog's feed. Not long ago, I conditioned a 45lb dog, and he was getting 45 ounces of water, in his feed, everyday. After eating, he would be all filled with water, sure enough. He was also a very hard working dog who needed all the extra fluid given. When I would go out the next day to work the dog, he would usually weigh 46-47lbs. So, combined with the water and the feed and after him emptying out, he was only a lb or two above his show weight. While it may seem a little strange and sound odd, if I was only allowing the dog to drink what he wanted, he would never drink that amount of fluid in one sitting. He wouldn't drink that much fluid in one day, and given the work he was doing, he needed all of it for his body to function at a high level which is exactly what you need when it comes to showing dogs.