The water cooled housing is used to prevent fires in confined areas. You can see that the engine is enclosed, and it's simply to keep it from burning up. Also, the Marine application usually dictates being run at sustained RPM for hours on end, and that's usually at or close to redline. At that point you have the load, the flow, and RPM, to keep the turbo spooling at all times.
There was a guy on PSN that made 289/551 at the wheels with his IDI. Supposedly had marine injectors, ATS turbo, and turned up pump. No other info was given.