Mazda did NOT pull the MS3 because of water ingestion..
The MSCAI did not have an air straightener and therefore caused a lean condition. Without the air straightener, the ecu would not be able to compensate Long Term Fuel Trims. Basically, with the turbulent flow, the computer would adjust and adjust and adjust until it was beyond it's range and just basically give up and throw a CEL. After enough complaints and enough research, AEM (original manufacturer) decided to make a air straightener as an accessory piece and offer it to MS3 AEM CAI owners. Unfortunately, it was too late as Mazda had long pulled the MSCAI off their shelves.
Cold Air Intakes are beneficial for what they do for any car. And hydrolock is honestly for incompetent pussies who drive directly into standing lakes of water on the road. The entire bumper is covered underneath so you tell me how the hell water got ON to the filter, and IN the filter. You'd literally have to drive your front bumper entirely into a puddle, deep enough that it would cover the entire front end.
Let it be clear, people do NOT get hydrolock from spraying water or rain.
SRI's have their benefits but you are still sucking in hot air, and that's an ultimate fact no matter how you look at it. I won't turn this into a SRI vs CAI conversation but I will post this helpful article that I was given a while ago from a fellow parts provider that I won't name.
http://www.kennebell.net/techinfo/general-info/HotAirWARNING.pdf
No offense Outkast, but as much research as you've done, please do not provide inaccurate information about the MSCAI. The "water ingestion" was simply a speculation given from a few members on the forum and turned into a general consensus. That is not the accurate reason why it was pulled.