The damage that squids get when out of water is due to suffocation, not due to being on land.

Also, water breathing should make it so that the player can only breath in water, not as well.

There are a lot of creatures that can "swim" but not "water breath", most of which spend at least part of their time on land without any problems, such as dolphins, walruses, penguins, seals, frogs, water snakes, and so on, and there are mods that add these creatures to Minecraft, so it is actually worthwhile to make this change.

Yes, it's a good idea. I'll add it once I'll get back to Metamorph.

Done.