I believe water/glycol has a much higher heat carrying capacity than
oil. It's also a lot less messy when it leaks, it is non-flammable, and
it will boil instead of burn if the engine does overheat.
I don't think water pump wear has much to do with it being used to pump
water, rather it has a relatively small bearing area compared to the
length of the shaft and the stress placed on it by the drive belt. If it
had a bearing on each side of the impeller it would likely last a lot
longer.
Most coolant related head gasket problems have to do with improper
coolant being used. If you use the right stuff with the right additives,
it's rarely a problem.
