Nah, its the biggest driver for people who care. Most people will see the "you just got your last update" notification and happily keep using the phone for several more years. It's not safe, but the reason that actually makes people dump their old phones right now, is the battery.

There are ways to make phone batteries replaceable, and water-resistant. One would be to allow water to enter the battery compartment, but make everything inside impervious to water, and merely protect the electrical contacts with something. We survived thicker phones before, we will again.

And besides, the main reason people value water resistance, is because if you do drop your phone in a lake, you can't have it affordably repaired, so people pay a premium for phones that are resistant to being damaged in the first place.