1)Water is relatively less dense. Mercury is 13.6 times more dense than water. SO, If you use water, you have to have the length of barometer of length (or height) 13.534 times the length of mercury barometer, which may be more than 11 meter in length.
2)Also mercury as compared to water, has comparatively less specific heat and good conductor of heat, could come to the same temperature of the atmosphere more quickly.