Just to add one point that I haven't seen mentioned here yet:
From an engineering standpoint, only a low-key water show (meaning low-key water/fountain equipment) would be feasible in this location. That is, something along the lines of the fountains used in Illuminations or whatnot. A fountain show such as World of Color or The Fountains of Bellagio would require a controlled/man-made lagoon for the sake of the precision equipment. A natural lagoon, such as that bordering DTD, would quickly wreak havoc on precision water nozzles and pump equipment. The amount of sediment, especially sand, in the water would quickly and completely deteriorate such equipment and render poor show quality quickly.
Like I said, any such show would require a controlled environment where the water quality can be controlled and maintained.
Now, the barge idea: that may be possible (all equipment could be serviced/maintained off-stage in a proper maintenance shop), plus it would be a lot lower-tech than a sophisticated omnidirectional nozzle show system.
Nevertheless, I think it would be a great venue to have some sort of a water show. I bet it would really increase traffic in the area and give a lot more draw for people to linger around PI, eat, drink, etc.