Water Levels vs Laser Levels
Water Levels
As stated before: All water levels utilize the basic principle that water seeks it's own level. The principle is very simple and they are very accurate over large distances. Even an error of 1/2" at 200' is considered extremely accurate. The reason they are so accurate over these distances is because they are not Degree Dependent. See figure 1.
Laser Levels
Laser levels a utilize device that emits a laser light to project a level line. They need to be leveled first, some are manually levels and others are self-leveling. Whatever the case may be the are Degree Dependent, meaning that in order to be accurate they have to be perfectly level to start with. This is why the best laser levels cost so much. In addition, most laser levels cannot project a beam 200'. Even a small error in leveling can result in a large error at 200'. See figure 2.
In Conclusion
Figure 1
Figure 2
The bottom line is that there is a use for both types of levels. Water levels are very effective tools for many types of projects especially blind leveling and DIYers. High end laser levels are, and will be, the go-to tool for high end builders.