But water is f---ing heavy!
Take a Scout Courier, its 100 tons which in Traveller terms means it displaces 100 tons of liquid hydrogen. Please don't stick your ship in liquid hydrogen. The fuel tanks can take the cold but many other pieces of equipment can't. That 100 tons of liquid hydrogen takes up 1350 cubic meters (and two hundred squares of deckplans!) What is the mass of a Scout ship? Let's say it masses about .25 tons, on a par with modern aircraft and space craft (the materials are probably way sturdier.) That's about 340 tons of mass. The fuel is 40 tons of that, not too bad. According to Atomic Rockets a fuel tank generally weighs about .15 * weight of fuel. So the Scout's tanks weigh 6 tons. Not a lot. Remember ship designers like to save money where they can.
Replace the liquid H with water, which weights one ton per cubic meter. The 40 ton fuel tanks now hold water massing 13.5 *40 = 540 tons, more than the rest of the ship! Maneuvering will not be an issue because you won't be able to lift the ship. The ship massed 340 tons before. The water fuel increases the weight by 540 tons - the 40 tons of H2 so it now masses 840 tons. The ship could make 2 gees in pen space which means it thrusts with 340 * 2 = 680 tons. You aren't going very far on an earthlike world. But the fun is just starting!
Remember those fuel tanks built to take the cold of liquid hydrogen and keep it safely sequestered? they were built to take the weight of 40 tons. Not 540 tons. True you won't blow up but drowning is a strong possibility. If you want your ship to be able to carry water those fuel tanks will mass about 80 tons which in itself is a large increase in mass for a ship that's between 300 and 400 tons mass.
But let's say the fuel tanks are a part of the hull which masses .25 tons per cubic meter. The the tanks can hold fuel massing 900 tons. I think that's asking a lot for what you pay for hulls but what the hell. You fill the tanks with water!
There is an advantage volume-wise. Water is 11% hydrogen by weight. Electrolyze the water and each displacement ton will give up 1.5 tons of hydrogen! Keep in mind that the electrolysis process may take some time and you don't want to mix the liquid hydrogen with the water so you need another set of tanks. Making a quick escape jump is no longer an option. Also your ship is probably still more of a bunker than a conveyance until most of the water is gone.
All this for 50% more hydrogen.
Finally refueling comes up. I am not a big fan of wilderness refueling. But it can be done with you (or me!) relatively safe in the ship. Anywhere there is a gas giant is your free fuel depot. If you choose water as your fuel of choice (paying for extra tanks, reinforced water tanks etc) you are still left with the fact that water in the cosmos is mostly in the form of ice. that means some poor bastard has to go EVA with a jackhammer and shovel and start filling the tanks. The only time it becomes worth is is if you have a garden world with oceans. Just drop down and fill the tanks. Ships do this in Traveller too, electrolyzing the water they suck aboard. Just bear in mind a planet with liquid water oceans will likely have life. Sea life. Has your referee been humming the theme from 'Jaws' or does he keep pulling out a copy of this and giggling?
Add to this tsunamis, bad weather miscalculating the ship's buoyancy and ... pirates? Suddenly EVA looks better as you can avoid animals and bad weather. But of course there will always be pirates where there is water.
Extra: You-thane, We-thane We All Thane for Methane!As long as I was carrying on about how using water for fuel in Traveller was stoopid, I decided to check out methane as a fuel (as in it contains hydrogen for fusion reactors.)
Liquid methane has a boiling point of -164 C as opposed to -283 C for hydrogen so cooling systems should keep it liquid easily. It weighs 464 kg per cubic meter so a displacement ton (13.5 cubic meters) would weigh about 6.26 tons, which is not as bad as water but still way heavier than hydrogen. It's also an explosive gas but easier to contain than hydrogen. Forty displacement tons of liquid methan weighs (6.26 * 40) = 250 tons which is still pretty heavy compared to hydrogen. The tanks will still need reinforcement. Assuming our scout normally masses 340 tons it could still make 1 gee with a load of methane. Methane is about 25% hydrogen by weight so our 250 tons of methane will have 62.5 tons of hydrogen or 50% more fuel. Furthermore methane can be broken down into carbon and hydrogen with high temperature and fairly quickly (say, I dunno, a fusion reactor?)
A ship using methane for fuel has its displacement figured normally except every displacement ton of fuel counts as 6.5 tons for purposes of figuring drive performances. Each displacement ton of methane counts as 1.5 tons for fuel. So our Scout in the above example would drop to M-1 and J-1but have 60 tons of fuel extending it's jump range over all at the cost of lower jump numbers. It might be worth it for long range missions. If the ship is carrying a normal load of hydrogen fuel it still masses a little extra 30 tons or so or 9-11% which could be overlooked. Methane compatible tanks could cost 50,000 credits per ton. Me, I'm sticking with H2 and honoring tradition.