What can water fire extinguishers be used for?

Actually water IS used as a fire extinguisher - but not for all fires. Fire extinguishers are categorized by the "class" of fire they are intended to extinguish.

In the USA (other regions have different classification schemes):

Class A extinguishers are often (but not always) just water under pressure and are intended to extinguish fires where solid organic materials such as wood or paper are burning.

Class B extinguishers are designed to put out burning liquid fires like oil, grease, gasoline, industrial solvents, etc. CO2 and foam are often used in these extinguishers. Water is not suitable because it would tend to just spread the liquid around and the burning liquid would float on top of the water and continue to burn. Even so, firefighters will often spray water over huge burning liquid fires (as a spray or mist) to cool things down and inhibit the spread of the fire to nearby flammable structures.

Class C extinguishers are designed to fight electrical fires. The problem with using water in these extinguishers should be apparent - the water would conduct the electricity and increase the hazard not to mention causing additional shorting which can destroy other electrical equipment not involved in the fire.

Class D extinguishers are designed to fight burning metal fires. Since many metals react with water to give off other flammable gases, pouring water on them is hardly a good solution. As an example - when pure sodium is placed into water it bursts into flames and give off Hydrogen gas.

There is also a Class K extinguisher that is intended for grease and oil fires such as might flare up in a pan in a kitchen. they overlap the Class B extinguishers somewhat.