The cooling effect would increase the oxygen content of the air by making it more dense. A similiar affect as when you feel the power increase on a cold damp morning as opposed to a hot dry afternoon. The P-51 Mustang fighter planes used a form of water injection to increase absolute horse power when needed, but they couldn't run it 'that long' without putting the motor at risk. The idea has been around a LONG time, I'm not up to speed on the cost/benefit/analysis of it and in it's various forms. No doubt there have been some water/alcohol injection systems marketed over the years promising tremendous returns that were mostly snake
oil, smoke and mirrors. But the basic concept is reasonable.