I suppose it's Squirtle's signature move, and I, like so many others before, have tried to find a *ahem* consistent use for this move. I've come to this conclusion: when (if) we finally do figure out some use, it's gotta be ridiculously creative. The most obvious use is the stand on the edge and blast a recovering opponent with it. Since this move only pushes and does no damage, theoretically you could push the opponent into the abyss without giving them back their up+b. However, most good players will go for sweet spotting the ledge when recovering, which is really easy with Brawl mechanics. The pushback for the move is decent when the target is freefalling or standing still, but if something is actually causing the target to move in a certain direction like up+b propels a character upwards, Water Gun will do very little to push the target back, and you're better off edgeguarding with b-air or f-air. So, in that way, Water Gun seems useless unless you really want to laugh at your friends.
I've never been able to make this work, but maybe someone else can. Get your Water Gun fully charged, then when your opponent is recovering, run at the ledge, quickly turn around and jump so that your momentum carries you backwards off the edge. Use your Water Gun when you're in line with or just above the edge of the stage, and you should be able to make it back to the edge with your double jump and Up+B. The idea is that your opponent will be DIing towards the stage, and if the stage does not have straight walls under the edges (like Pokemon Stadium, Smashville, Final Destination for some characters), your opponent may be swept under the stage if you catch him off-guard with the DI. So there you go...very situational, as it only could work on certain stages against certain recoveries, and if you miss you risk getting edgeguarded on your way back. Again, I've never made it work, but seems like it could =x
