It is a well known rule that the more evil you are the more cool and imposing you must appear because, by definition, being evil means you don’t have much substance and must therefore use pomp, pageantry and artifice in an attempt to conceal and distract from your utter lack of real worth and power. This is why the Nazis are universally acknowledged as having the most bad-ass uniforms in military history, they had to distract from the emptiness and evil of their ideas.
Therefore I think the the reason the Wringwraithes were afraid of open water was because it would ruin the high quality, dry-clean-only fabrics that dark lords are of habit to use for the attire of their evil minions.
Now that I think of it, the Ringwraiths kept to their horses and/or flying critters when they were in the snow, too.
I suspect that basic black hides the blood of innocents fairly well, but it does poorly in obscuring mildew (seriously, how often did the Nine Kings of Men wash their own clothes when they were alive, and I certainly can’t picture a Ringwraith doing laundry.
As for the fire…fire makes you sweat. Have you ever tried to get sweatstains out of black fabric? Can’t be done.
What self-respecting Hobbit woudl fear a Ringwraith with pit-stains?
Their powers were still building at the beginning of the Fellowship of the Ring and they were very far from the source of their power. As they got closer to Sauron unleashing the ‘Wargs of War’ and got back near Mordor their power was much stronger. Finally their greatest power was fear and it worked best against humans. Hobbits were far more resistant to the fear and the Black Breath than even the Dunedain. Common Humans would die quickly.
This all fits with ancient myths that Tolkien borrowed from and weaved into his stories.
Nobody ever seems to consider that, just maybe, it was the Ringwraiths’ horses that didn’t like water.
Being trained to serve as a mount for the living dead has got to seriously mess up a horse’s mind; hydrophobia was probably the least of their problems. I’m sure that if we’d followed the Nazgul around, we would have seen their horses freaking out at the sight of dragonflies, oddly shaped rocks and trees, clouds passing over the sun, etc. But what other choice did the Nazgul have? They couldn’t very well seek the Ring discreetly while riding their pterodactyls all over the place. So they had to either settle for twitchy insane horses, or walk. Beggars can’t be choosers.
Actually, the Wringwraiths were the first generation evil minions of the MiddleEarth 3.0 and still riddled with security flaws even the lamest halfling could hack. They were also considerably more timid and hesitant than their replacements, the Ringwraiths, hence their fear of water, small fires, boat docks, etc.